Never let it be said that the president is unpredictable when it comes to our economy's strength and the battle he's waging with the Chinese over trade. I told you the other day that I feared a powerful employment number and then a flippant blast at Chinese behavior not long after.
Boom! We got it just as scheduled and it decked the market. What's going on here? How about the president preparing tariffs on another $267 billion in Chinese imports on top of the $200 billion in tariffs already about to be slapped on.
The president said "I hate to do this but there is another $267 billion ready to go on short notice if I want." This statement is significant for several reasons. One is that there will basically be a tariff on everything we import from China. Everything. Second, it means that any low level talks that were going on aren't having that much luck. Third, the goals of the president are pretty clear.
White House chief economic adviser Larry Kudlow basically laid it out to me when I asked him whether the president is going to press his advantage given that our stock market is doing a heck of a lot better than the Chinese - up 7% for the S&P and 14% for the NASDAQ versus down 18% for the key Shanghai index. He invoked a version of former First Lady Nancy Reagan when it came to trade. Just say no.
I do believe that the president has gotten a better hand since he was elected. Today's employment number did show sustained job growth. The market does fly on no trade days based on a robust U.S. economy.
But what a predictable president he has become. And that means look out as good news for the economy has become bad news for stocks.