Stock vigilantes might have to work harder to tame Trump

Open the White House viewing newsletter for free

Your Guide to What is the US 2024 Choice for Washington and the World

The vigilance of the particular stock exchange will have to work much harder than this to alleviate Donald Trump.

Since the re-election of Trump, many investors and analysts have been good, the president will not do very wildly by economic policy, as he uses shares, as he will avoid them in his real time. Short, sharp decline in reserves in response to any unique statement will soon make a change of heart, or the theory goes.

It can be true at some point. But now it’s not. Instead, the direct market response from the neighbors and allies of the imminent taxes of the goods from Canada and Mexico and goods from China were better.

The benchmark S & P 500 index opened 1.4%, not large, but hardly disaster. In the index, the immediate period of 5% and maybe some cessation of connection in the worstly heavy majority shares could be enough to the president, but not this.

The possible reason for relative calm is that the large piece of investors thinks that starting a trade war with NATO allies is an active idea for the US economy, geopolitical stability, or both. Perhaps the leaders of the money are happy with the USAID view, which are at risk or Elon Muski Government’s Efficiency Department to enter the treasury plumbing factory. Let’s say now that this is a theoretical opportunity, but not the most probable explanation.

Instead, Ho-Hum Reaction, which is reflected in dollars (a small, very closer) and asian and European shares (a small, non-honeyguest), reflects several important assumptions.

One is quoting Mcenroe, he can’t be serious. The inevitable increase in costs for consumers of imported goods, the likelihood of potential, the reconstruction of potential, overcame, and causing a global relationship to some point. Self-harm is just too big. When Jan Tsaghus and others put it close to Goldman Sachs. “While the worldhood is incomprehensible, we think that the tariffs focused on Canada and Mexico are probably short.

This turned out to be quite protected. Even before the new floors started, Trump and the President of Mexico said that they were a month. But so far, the evidence suggests that it is smooth that it will take over calm heads.

The other feature is that investors are just bad when reading Trump. He has been a fan of tariffs for decades. He used them freely within his first term of office. He was constantly talking about the campaign trail. He spoke about them in his inauguration. But the markets could not take him according to his words.

The investors thought that illuminated self-confidence would present to the president. Then they thought that Treasury Secretary Scott Best would perform as adults in the room, sensitive to cold things in economics and was able to remove the president from his dark impulses. None of them worked.

“Trump has ended in markets, media and politics, that his tariff threats should be taken with salt grain,” wrote Rabobank’s strategic rejuveni.

Thus, now these markets are on a low salt diet, it is worth defeating Trump completely literally and completely seriously a number of geopolitical problems. One is Europe. The stock was a Jog Late because the first days of Trump have not supplied tariffs on the bloc. But as Trump reminded us today, he is serious about the EU, which he accused of spending Monday. “cruelty“In trade relations with the United States. Stop.

One is Panama and Greenland. I continue to ask bankers and investors what would it be if the victory really tried to provide a new area there? They are constantly laughing at me, although Fund Manager suggested buying German government bonds. This becomes less funny during the day.

Even with the best scenario, where Trump extremes any concession, he wants to back down to new tariffs, significantly damaged. “Even if short-term tariffs have two consequences,” Paul Donovan said at UBS. “Distrust can complicate negotiation trade transactions more. If the media cycle fears us consumers about real estate growth or job security, they can be less inclined. “

Then economic pain can still be real, even from threats. But it’s ambitious to assume that stock alertness is going to stop it. Trump Kuradi This early reaction, as a victory and ratification by Wall Street to make America again to his efforts.

katie.martin@ft.com