The US Stock Market took another big loss Monday, with the Dow falling 508 points, the S&P 500 plummeting to its lowest level of the year, and Nasdaq joining the Dow & S&P 500 in negative territory for 2018. All three indexes have plunged nearly 8% so far this December.
Health care stocks contributed to the tumbling market after a judge in Texas struck down Obamacare following a lawsuit brought by Republicans and enthusiastically championed by the President. Though many legal experts believe Obamacare will eventually be upheld by higher courts, the news was rattling to the market.
This month “inverted yield curve” became the hottest buzzword among Wall Street analysts. It happens when short-term U.S. Treasury bonds earn more interest than long-term ones. It’s one of the four horsemen of a financial apocalypse, appearing before the Great Recession and recessions of 2000, 1991 and 1981. We are seeing such a curve right now.
Investors are expecting growth to slow in 2019, and President Trump is at least partially to blame. The President is unnerving investors by lashing out at the Federal Reserve, which is supposed to operate independently of politics, for raising interest rates.
Of course, this is merely the latest in a series of catastrophic policy missteps. The President has sparked a trade war with China, alienated our international partners, threatened American companies who pursue global opportunities, given millions of dollars to companies who then shut down American factories, and driven up the deficit with out-of-control military spending combined with reckless tax cuts. Are you tired of winning yet?
Even when confronted by his own political party and advisors, Trump doubles down on his ill-conceived populist notions. This led to his own economic advisor, Gary Cohen, quitting in frustration. All of this doesn’t appear to phase the president’s drooling base of supporters. Rural areas, which are particularly feeling the effects of Chinese tariffs, turned out for Republicans in the midterm elections.
This President has been seemingly obsessed with tearing down President Obama’s legacy. It’s unfortunate that now includes Obama’s strong economy and job creation numbers.