City watch: Will ‘Trump put’ Ride to the rescue of us market

The tax cuts, the reduction of regulation and stimulating policy were all the actions that affirmed that they would boost the performance of the stock market and frequently cited the increase in stock markets such as evidence of the success of its administration.

In 2018, he said: “The reason why our stock market is so successful is for me” and then warned in 2019 that if he lost the next elections, the markets would crash.

So what will the president do with the current weakness, with the S&P500 in almost 10% from the peak of mid -February, and now below the level seen in the days prior to the November elections?

Andrew Mann by JM Finn (Image: JM Finn) This is the question that has been to exercise investors, with the ‘Trump put’ only one of the things they have been discussing. This refers to the perception that the president will intervene to support financial markets during periods of economic uncertainty.

The belief in Trump’s ‘put’ seemed that the markets recovered quickly after recessions, since more tax cuts or promises of infrastructure spending increased investor confidence.

The term encapsulated the idea that Trump would prioritize market stability, potentially at the expense of long -term economic health.

Many argued that the belief in the ‘Trump Put’ encouraged the behavior of the most risky investors, but fundamentally offers us a genuine debate about the role of government in the markets, and if those responsible for formulating policies should intervene to support the prices of assets, or allow them to autocoregir.

For now, things may not be bad enough for Trump to act, but it seems unlikely that his approach to market performance has changed so much, and it could still be that the ‘Trump put’ trips to the rescue of the US market once more.