IF THE stock market has forecast nine of the last five recessions, as it’s been said, then at least it’s right more’n half the time. But even if no recession is around the corner, no American likes the stock market to dive 500 points one day, 600 points the next, “only” 200 the next, and then up again to start all over. (When it gets to the bottom it goes back to the top of the slide, where it stops, turns around and goes for a ride.) It’s enough to make owners of 401(k)s a little seasick.
It’s dangerous these days to write about the stock market for a weekend editorial. For all we know, the thing could jump 1,000 points tomorrow, as it did just before Christmas. But what we wouldn’t give for the roller coaster to even out a bit, maybe just long enough for us to catch our breath. Give us a slow and steady climb any day. The steadier the better.
A long time ago, all the way back on Wednesday this past week, Apple sent a letter to investors saying that its revenue estimates for the first quarter probably won’t meet expectations. That was the latest gut-punch to the stock market, which quickly went off track again. The CEO of Apple, Tim Cook, blamed the slowing economy on mainland China and “trade tensions” with the United States.
That is, tariffs, the threat of tariffs, and President Trump’s famous gut instincts.
Or, as Mr. Cook told his investors: “As the climate of mounting uncertainty weighed on financial markets, the effects appeared to reach consumers as well, with traffic to our retail stores and our channel partners in China declining as the quarter progressed. And market data has shown that the contraction in Greater China’s smartphone market has been particularly sharp.”
So it really is true that beggar-thy-neighbor trade polices don’t help anybody. Which some of us learned after reading about the Great Depression, and those tariffs that only made it greater.
Trade wars aren’t good and aren’t easy to win, no matter what anybody tweets. Last week, Fox News reported as much with this headline on its website:
Apple has become the biggest casualty
in Trump’s trade war with China
When Fox News reports that the president has created a problem, the White House can’t blame “fake news” or a liberal-leaning media.
Is there good news buried in this? Anywhere? Just a little? You betcha. Helter-skelter trade policies have given us helter-skelter markets, and the president has taken notice. His economic adviser Kevin Hassett told the media: “Of course, the president is concerned about markets.” And it just so happens that this next week his people are going to fly to Beijing for trade negotiations with the ChiComs. The hope is that the two countries can come to a negotiated deal before March 1, when U.S. tariffs are set to rise.
It was always unwise for the president to brag on the markets, given that they go up and down for a number of reasons. But right about now, he’s probably hoping for a comeback and another charge toward a 25,000 Dow. That prospect might make his famous gut more educable, and more willing to deal with the Red Chinese. And call off these tariffs before they’re no longer just threats shaking confidence and the markets, but actual stumbling blocks killing commerce.
If he only would, he could put everything right. And even take credit by calling any market comeback “the art of the deal.”
Most investors might not care who gets the political credit. They’re just tired of watching their portfolios dive by three percent every week.