If you’re a new investor, you’re a little jumpy. Today the markets – the American markets – took a tumble. The Dow Jones Industrial was down 2.34%, and the others were comparable. The chart illustrates the neck-breaking ride:
But what really caught my eye was the reaction of the Asian markets to the latest threats in the trade war. From Daily Record News:
Most Asian stock markets turned higher Friday as investors brushed off initial worries about the Trump administration’s latest threats of yet more tariffs on Chinese imports, indicating concerns were easing about a brewing trade battle between the world’s two biggest economies.
KEEPING SCORE: Japan’s benchmark Nikkei 225 index edged 0.1 percent higher to 21,672.94 while South Korea’s Kospi slipped 0.4 percent to 2,427.21. Australia’s S&P/ASX 200 crept 0.1 percent higher to 5,783.40 and Hong Kong’s Hang Seng jumped 1.1 percent to 29,852.93 after trading resumed following a holiday as investors caught up with the previous day’s global gains. Singapore’s share index rose while Indonesia’s fell. Mainland Chinese markets remained closed for a holiday.
My suspicion is that the Asian markets recognize that the biggest local force is China, not the United States. That’s natural. But they also recognize that China, whatever you think of its trade policies or its political system, is stable and will respond to all tariff threats only after due consideration.
American markets don’t have that level of confidence in President Trump, or the balance of the GOP leadership in Congress.
I can’t prove this supposition, of course. But it’s congruent with the evidence. And it leaves Trump looking weaker and weaker. What if Kudlow turns out to be wrong again, and China refuses to knuckle under and come to the bargaining table? Does Trump eventually backtrack because the agricultural portion of his base is hurting too much? Or does his ego lead him down the path of not backing down either, until we’re staring a global depression in the eye again?
And how ever will he blame Obama and Clinton for that?
Nor are GOP leaders happy. WaPo reports:
In a rare moment of agreement between the ultranationalist Chinese paper and a Republican lawmaker, Sen. Ben Sasse (R-Neb.) responded to Trump’s move using similar language.
“Hopefully the president is just blowing off steam again,” he wrote in a statement Thursday. “But if he’s even half-serious, this is nuts.”
Not that it matters. Until Trump’s base finally cracks up – if ever – he’s safe from a GOP revolt, it seems.
