Looking to nail the next market bottom?
Keep an eye on Donald Trump’s social media activity. “STOCK MARKETS CRASHING”, ranted Trump on August 4th. “I TOLD YOU SO!!! KAMALA DOESN’T HAVE A CLUE. BIDEN IS SOUND ASLEEP”.
Further posts regarding what Trump called the “Kamala crash” came on the following Monday – the very day stocks bottomed. Since then the S&P 500 has shot upwards, soaring 10 per cent in a fortnight and coming within touching distance of all-time highs.
It may be harsh to describe Trump as a contrarian market indicator but his approach shows the risks of connecting every index movement to the US election race. Earlier this year Trump tried to claim the credit for the market rally, asserting that investors were pricing in a Trump victory in November. Making that argument is harder today given the recent rally coincided with Kamala Harris’s upward momentum in the polls.
Of course Harris had nothing to do with the rally, just as she had nothing to do with the brief market swoon. Trump’s approach isn’t just silly – it’s politically dangerous for him. It’s especially risky in a bull market in that dips usually get bought in a bull market. Talking about the “Kamala crash” and warning of stock market Armageddon will look unwise in November if the S&P 500, already up almost 20 per cent in 2024, continues to hit new highs.
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