The Gilmo Report

May 12, 2019

May 11, 2019

The trade tariff increase threatened by President Trump last weekend went into effect Friday at midnight, although many pundits did not think he would make good on his threat. The general thinking was that this would be disastrous for the economy and therefore the President could not afford to raise tariffs given that he is supposedly sensitive to the stock market and his mythical, “booming” economy.

But he did, and those who believed such a move would immediately send the market into a tail-spin were looking at least partly right within the first two hours of the trading day on Friday. The Dow went down 348.50 points in the first 90 minutes of trade, while the NASDAQ Composite Index dove a total of 151.25 points. The market looked set for a disastrous day.

I blogged on Thursday afternoon, however, that we would want to at least be mindful of a third possible scenario.

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