Stocks 'detox'
Investors have been caught off guard by a change in rhetoric from the Trump administration on equity markets.
Take Donald Trump seriously but not literally. That refrain — coined by The Atlantic in 2016 but used by everyone from billionaire venture capitalist and Trump confidant Peter Thiel to ousted former communications adviser and now Trump critic Anthony Scaramucci — emerged during the US president’s first term in the White House as a framework to understand his unexpected rise to power and unconventional method of governance.
The mistake the media covering Trump had made, according to this idiom, was taking Trump literally but not seriously.
Now, less then two months into Trump’s second term, investment markets are facing their own ‘seriously but not literally’ moment. US equity markets fell sharply on Monday night (Australian time), and the benchmark S&P 500 index has dropped almost 9% in less than three weeks, amid rising fears that Trump’s policies and approach could tip the world’s largest economy into a recession. For its part, JPMorgan is now putting the odds of that at 40%.
Trump's tariffs were widely telegraphed. But as Jack Derwin and Jassmyn Goh reported today, what has really caught investors off guard is the shift in rhetoric from the administration over markets and its willingness to support them.
