A Long War

Stocks are attempting to stabilize after President Trump threw everyone for a loop by Tweeting his intention to hike tariffs on $200 Billion of Chinese goods ahead of what was expected to be the week that ended the 17 month trade war. Rather than going into the whys, hows, whats, whens of this on-going war, I thought today I’d share a chart highlighting the key moves from the US over the last 17 months (the related posts at the bottom of the page go into the other stuff).



If you look very closely you will see the S&P 500 is within a whisker of where it was in January 2018 when the President imposed the first round of tariffs. The point of this is to remind you how many times the markets were spooked and then celebrated the various announcements throughout this ordeal. It’s likely going to go on for a while.


When the president was elected I asked the question — will we get the “good” Trump or the “bad” Trump? I wasn’t talking my own opinions on his policies, but what the market perceived as good and bad. We saw the “good” Trump in 2017 — tax cuts, deregulation, getting along with other nations, etc. The market responded accordingly by posting the 2nd best year of the entire 10 year economic recovery. In 2018, the President decided to start making good on his other promises, primarily immigration reform and the trade deficit. The market doesn’t like the impact both of those have on the economy and we have seen wild swings accordingly.


It’s already the presidential election season, which means we are likely to see the President continue to cater to the voters who got him elected — those more moderate/middle class voters who have fallen further and further behind the last 30 years. I’m not sure how this will be resolved, but I do know having strategies, such as ours, designed to filter through all the noise to position portfolios in a way that matches both the willingness and ability of our clients to assume risk, will pay off if this keeps up.

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New Kent, VA
Jeff joined SEM in October 1998. Outside of SEM, Jeff is part of the worship team at LifePointe Christian Church where he plays the keyboard and bass guitar. He also coaches a club soccer team.