March Madness in the Markets… Caused by Trump?

I’m a big college basketball fan… Obviously, March is my favorite month!

That’s when the College Basketball Tournament happens, nicknamed March Madness.

I wish I could spend this week talking about college basketball.

Instead, the most important March Madness is happening in the stock market!

Last Monday everything started to fall apart.

The stock market crashed that day with the DOW falling over 600 points!

The cause? President Trump announced news tariffs on China, Mexico, and Canada.

Leaders in those countries threatened retaliatory tariffs on Tuesday, which caused another 700 point drop in the DOW.

Over $2 trillion was lost in the stock market in just two days!

It was the worst 2-day period in the stock market in over 6 months.

Wednesday was a tad better as the market recovered some of those losses.

The reason? Trump considered walking back his tariff threats to our trading partners.

Are you sensing a theme for the week? We aren’t done yet.

On Thursday, even more tariff news as Trump announced he’s pausing the tariff increases for another month.

That must mean the market rallied and everything’s wonderful again!

Not so fast! The market fell and wiped out Wednesday’s gains.

What’s going on?

Uncertainty around US trade policy is rattling the markets. Trump can’t make up his mind!

Our trading partners are getting sick of it!

And they aren’t the only ones.

American business leaders have started to raise the alarm about tariffs and a fickle trade policy.

CEOs from Costco, ON Semiconductor, Ford, and General Motors have all criticized Trump and his trade policies.

Here is an article with their comments.

Unfortunately, it doesn’t stop there.

The Federal Reserve Bank of Atlanta is full of experts who forecast economic growth.

A few weeks ago they predicted our economy would grow about 2% compared to last year.

Not too exciting, but not a disaster either.

That forecast has now fallen to the economy SHRINKING 2.5%!

THAT’S A DISASTER!

What happened?

Trade fell off a cliff!

Net exports are an important part of measuring an economy. It’s a country’s exports minus their imports.

A few weeks ago the Atlanta Fed said net exports would be down, but not enough to really impact economic growth.

Now, it’s a different story.

Net exports are expected to nosedive.

The Atlanta Fed expects companies to import more products from other countries than they export out.

Almost the entire drop is because of trade!

There’s a silver lining in all of this.

All of these fears might be noise.

Forecasting economic growth is incredibly difficult, even for the experts at the Atlanta Fed.

Their forecasts could be completely wrong!

Trump changing his mind on tariffs adds a lot of uncertainty to the US economy.

But do you know who doesn’t care about trade?

Companies that do all of their business in the United States!

This uncertainty could encourage companies to do more business just in the United States.

More jobs and investment in our community. We might not even need tariffs.

That’s something we can get behind!

What are your thoughts? Is this just a small setback in the stock market that will reverse over the coming weeks?

Or do you think these trade concerns are warranted and more pain is coming?

Send me an email on what you think!