As we come up on the 241st Independence Day, I don’t believe the US has ever been more divided since the late 1850’s and early 1860’s during the run up to the Civil War.
However the political strife — lead by President’s Trump’s acceptance by maybe half the country — appears to be slightly less bellicose than the civil unrest in 1850’s, and certainly has no effect on financial markets.
While Wall Street’s CEOs have come out vocally (and via Twitter) criticizing Trump for his climate change stance, however these execs are seeing their stocks hitting new highs as they also take care of their shareholders with large buybacks and dividend spikes.
Most of the most ardent Trump opponents on both coasts are also the ones benefiting the most by the unrest in DC in their portfolio. Since the White House is mired in its own daily theatrics, which drives the news of the day, there is little that can be done to fix what is wrong with the US.
A defensive administration, with Congress having to deal with the fall out, is creating a gridlock that leaves much undone legislatively.
This seems to be the most logical reason for facelift tweets and CNN memes. Why else would a president sabotage his agenda?
I don’t subscribe to the theory that Trump is unbalanced and needs to be managed. He cannot do these acts without a belief by many in the administration that this is a good tact.
A proof to this could be despite all this going on in the middle of the night from the White House, the fear on the Street is nonexistent — the VIXX index measuring volatility is below 11.
Historically these “unpresidential” acts, which would be seen as raising uncertainty, would have markets skittish. However, these acts push any real change from happening on that day.
If he acts continue, then no change will happen this week, or this month, or this year. And I believe that’s what the market is counting on for the foreseeable future.