This morning’s disappointing jobs report confirmed two things that I already knew, tariffs are doing a real number on the economy and we’ve entered a bad-news-is-good-news (bad news means the Fed will cut its benchmark interest rate) period for stocks; the Dow, S&P and Nasdaq are all positive in the futures session as I type.
Bottom line; While Trump continues to apparently unknowingly hit the economy with protectionism (his trade adviser/economist???? Peter Navarro said yesterday that all this makes him “bullish”), traders are betting that the Fed can keep the economy afloat. Sadly, in the long-run, they are dead wrong!
Conditions are not yet recessionary, thus, there’s time for what is becoming a downward trend in too much of the data to turn around, however, as I’ve been stating literally for months now, it’ll take a bigger downturn in stocks to wake up the Administration to the reality that tariffs are a direct tax on the perpetrating country’s economy. Clearly, as Trump stated last year, prior to the fourth-quarter bloodbath, with the market back near all time highs he believes he’s “playing with the bank’s money.” Problem is our macro index was scoring in the mid-to-high 40s at the time, our latest reading is 10.59!