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Trump Era 2025-2029 : Stock and Economic Comment

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Meta and Microsoft released extremely impressive June quarter results, and some are suggesting the gargantuan bets on AI revolution are starting to pay off. Those June quarter earnings stood out: Meta stock, already up 43 per cent in the last three-and-a-bit months jumped as much as 10.7 percent in after hours trading, while Microsoft ran up 7.5 percent.

As a commentator stated, these are seriously big moves in seriously big companies, and underscore just how much money is chasing this bull market.
Powell can’t ignore that – and he isn’t. “It seems to me, and to almost the whole committee, that the economy is not performing as though a restrictive policy is holding it back inappropriately,” he said during his press conference.

Bull market lives despite Fed. Will trumps hectoring for a rate cut add fuel to the fire?
 
If the US can drop cheap Chinese imports, I don't understand why Trump keeps on reneging on the high tariff rates.

A lot of these so-called trade deals are Trump speaking from his butt cheeks.

Japan tries to track US tariff deal progress without written agreement​

With the U.S. juggling negotiations with multiple big trading partners, Japan has indicated that the two sides will not jointly draft a written agreement.
 
farmerge said:
Interesting side issue.
The Trumpet keeps banging on about these "big beautiful tariffs and the trillons of dollars flowing in" but no mention of what the average punter is being slugged in the meantime.
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So lucky to be in Australia where the average punter has been so lucky with decreasing wealth for now the last decade.
The status quo was and is killing the average western Joe.
We will judge in 10y
 
To date Trump has ZERO signed deals on tariffs.
His policy is that of a bully, threatening every nation in the world with tariffs which are for the most part either nonsensical or baseless.

Despite Trump claiming the tariffs will bring in $Trillions, in 2025 it is expected to be closer to $250B.

The Budget Lab at Yale modelled likely effects and these can be found here. There is no good news for America.

But fear not. Trump has expunged staff that are responsible for data he does not like, and is having his agencies redefine the metrics so that bad numbers no longer appear. This was the case for America's recent GDP data. And while it's true that their recent GDP data looked good, it was mostly on the back of a decrease in imports (which are a subtraction in the calculation of GDP) and some increase in consumer spending due to tariffs. Even worse for Trump, US GDP numbers exposed both decreases in investment and exports.
 
Yep, the US economy is in a lot of trouble.

Trump is the one spreading fake news; he doesn't want the world to know that his policies are failing.

Trump fires labor statistics boss hours after the release of weak jobs report​

Without evidence, Trump called the data "rigged" and implied that BLS Commissioner Erika McEntarfer manipulated the numbers "for political purposes."


President Donald Trump on Friday ordered the firing of the head of the Bureau of Labor Statistics, hours after a stunning government report showed that hiring had slowed down significantly over the past three months.

Taking to Truth Social, he attacked Erika McEntarfer, the commissioner of the BLS. He claimed that the country's jobs reports "are being produced by Biden appointee" and ordered his administration to terminate her.

Trump fires labor statistics boss hours after the release of weak jobs report

Without evidence, Trump called the data "rigged" and implied that BLS Commissioner Erika McEntarfer manipulated the numbers "for political purposes."
www.nbcnews.com
 
I guess when he has finally sacked everyone in a power position and replaces them with nodding fools, then where does he go to when the lies and half truths can no longer we blamed on the heads that he rolled.
 
farmerge said:
I guess when he has finally sacked everyone in a power position and replaces them with nodding fools, then where does he go to when the lies and half truths can no longer we blamed on the heads that he rolled.
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Makes you wonder how many of the others have tampered with economic stats to keep Trump happy and not lose their job.
 
TimeISmoney said:
Makes you wonder how many of the others have tampered with economic stats to keep Trump happy and not lose their job.
Click to expand...
Basically economic stats coming out of the US won’t be trusted from now on as Trump will threaten to fire anyone who releases bad numbers. Install a yes commissioner or no commissioner at all, just govt propaganda telling everyone, everything’s just fine and dandy with this economy, NUFF SAID !!!.

We are talking about former democratic country here with supposed free speech.
 
Looks as if now it is more likely to rival a communist type propaganda set-up.
 
DannyB0000 said:
Basically economic stats coming out of the US won’t be trusted from now on
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Agreed although there's a lot more ways to fudge economic statistics than the blatant one of sacking the officials producing them.

One is simply to have policies intentionally seeking to push the things being measured in the desired direction in order to make the data look good, ignoring that measuring those things is intended to be an indicator of the overall economy, it's not because those are the only things that matter. As a concept it's akin to teaching to the test, it's cheating the intent whilst remaining legal on a technicality.

Various governments have done that historically. For example "cash for clunkers" programs mostly aren't about road safety and they're definitely not about the environment. It's just that new car sales is a measured economic statistic and a lot of countries have or had a domestic car manufacturing industry that needed propping up, that's all.

Another is thinking CPI measures inflation, failing to acknowledge that it's actually measuring consumer spending and the two are not the same. Just because consumers stopped buying something, because it became too expensive, doesn't mean it should be removed from the index if the aim is to measure inflation.

Substituting hamburgers in lieu of steak tells you what consumers are spending money on but if you wanted to measure inflation, you'd use an unchanged consumption of steak and just track the price.

We have examples of both of those here in Australia as do most countries. Government policies intentionally focused on the things being measured and ignoring the rest. CPI calculated in ways that hide the true level of inflation, failing to acknowledge that substitution is a response to inflation not a mitigation of it.

So I agree the US has a credibility problem going forward, but I'll argue economic statistics haven't been credible for decades. It's just that the degree of manipulation has gone from plausible deniability to blatantly in your face.
 
To add to smurf's post:

There are employees within the finance industry (whether private intelligence firms, banks' or hedge funds own intelligence etc etc) whose job it is to run the sums using more accurate or even just the old methods to see what the data really is or says in order to give their own employees or clients a more accurate picture of what is really going on.

You can actually purchase this information, it's the exact kind of thing intelligence services like the bloomberg terminal provide, but the thing to remember is that government bodies like the central bank use their own official data to drive their decision making (ostensibly).

So if trump wanted powell to dump rates and powell's like "yeah m8 the data says no" then the way you'd game the system would be to fudge the data to say that rates need to be dropped and thus force the fed's hand that way.

Which is exactly what happened here for nearly the entirety of the howard era
 
And there's also no reason why you couldn't create your own "basket of goods" with various weightings to calculate inflation if you wanted to, the question would then just obviously become how accurate it is.

If you were to run the CPI sums with a 50% weighting towards house prices for example you'd see that we've had runaway inflation for 26 years now.

See where I'm going with this?
 
Trump has unilaterally determined by Executive Order a tariff rate that applies to goods imported into America.
Not a single nation has to date signed an agreement on reciprocity arrangements.

Although Trump is trying to play hardball with Canada and Mexico, a great deal of their trade is already governed by the United States-Mexico-Canada Agreement (USMCA) , which Trump actually signed into force on July 1, 2020. Trump was unhappy with the previously in place North America Free Trade Agreement (NAFTA) as he regarded it as unbalanced with respect to American workers, farmers, and businesses.

It's possible to find a few economists who think Trump's tariffs will work, largely because they will bring back manufacturing jobs to America. For this to be true, Trump would need to raise tariffs considerably higher for many of the products that America presently imports as American manufacturing costs are significantly higher. Other problems with Trump's jobs idea relate to:
  • Increasing use of robots already replacing workers in America
  • Lack of supply chains to readily produce what they want
  • Lack of confidence to invest in new manufacturing in case Trump subsequently does a better deal with countries, thereby removing the tariff protection that would have been the basis for any new investment
  • The extended time frame necessary to get any new product made, given in many cases it would involve the actual construction of a new manufacturing facility.
  • The lack of skilled workers to make whatever has been previously completely offshored.
In the longer term irrespective of tariffs, American automakers and their consumers will be the biggest losers. They cannot compete with Chinese automakers in any market segment except pickups and some specialised ICEvs. And they are so far behind (except for Tesla) in manufacturing EVs that they will probably go broke trying.

 
While I agree that various measures - such as the CPI - may not have the ability to reflect the accurate intent of any government regarding an aspect of the economy, the real issue is that of consistency.

Most western nations use independent bodies - like the ABS in Australia - or government departments that abide by international conventions, to measure a range of things affecting their economy. Typically a nation's Executive Branch will never interfere with how the various data are being collected and presented. That allows for any and all to analyse the data and see what trends are playing out over time, on a reasonably consistent basis. Consistency of measurement also allows analysts to adjust for inherent weaknesses in the metric. For example, the unemployment rate does not measure underemployment, nor the skills of those unemployed. That latter metric would be very important for determining major economic shifts, especially at regional levels, and implementing mitigating policies.

What Trump has done has a number of implications:
  • The capacity for meaningful analysis by respected subject experts will be lost
  • Rigging the game will become a sport for agency sycophants (aka Trump appointees) who would constantly change the rules and tools for both measurement and revision of data in order to paint a picture that Trump agrees with
  • Internal trust of the Administration's various reports will be completely lost. Note that this is not confined to just economic/labour force measures, but also health care, the environment and many other areas identified here
  • Internationally America becomes a laughing stock, using dodgy data to manipulate America's standing in the world.
 
rederob said:
  • Internationally America becomes a laughing stock, using dodgy data to manipulate America's standing in the world.
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Here's a stock that can be measured

The U.S. stock market significantly dominates the global market, holding a larger share than the rest of the world combined. While the exact percentage varies by source, estimates consistently place the U.S. market at roughly 40-60% of global market capitalization. This dominance is reflected in various metrics, including market capitalization relative to GDP and overall index weightings.
 
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