VIDEO: As Liberation day approaches, the key question is whether the White House cares how the stock market reacts. We discuss the 6 reasons President Trump wants the stock market to rally post-Liberation Day. And does political affiliation explain why the stock market and bond market disagree?
Please click below to view our Macro Minute (duration: 8:29).
President Trump’s “Tariff Liberation Day” announcements are scheduled for 4 PM tomorrow, following market close at the Rose Garden. The central question for investors is how does President Trump want the market to react. Despite claims to the contrary, evidence strongly indicates Trump does care about stock market performance, as underscored by recent concerns expressed by Press Secretary Levitt regarding market volatility’s impact on retirees and their 401Ks.
- TRUMP 2.0 Tariffs: 6 reasons he wants stocks to rally
– Public validation of his tariff negotiation
– Public support already waning as shown in voter approval, ISM survey, consumer surveys
– Stock market “crash” would lead to a recession.
Average fiscal stimulus = 2.2% or $700 billion
– Tariff likely drives shift to on-shoring:
$6 trillion in future Capex
– US companies need “friendly” capital markets to fund moving PP&E to USA
– Will Trump push for USA debt ratings upgrade to AAA? - Trump views a strong market reaction as validation of his tariff negotiations, crucial amidst reported anxiety in the White House and a potential blame game scenario outlined in a recent Politico article.
– Already, countries such as Israel have announced the elimination of tariffs on U.S. goods, with Mexico, Canada, and the UK expected to follow suit shortly. - However, waning public support revealed through voter approval ratings, the ISM survey, and consumer confidence data suggest the market’s reaction to tariffs is critical to maintaining political stability.
– March ISM data indicates tariffs are causing supply chain disruptions and declining orders, especially in sectors like machinery and electronics.
– Further deterioration in business conditions in miscellaneous manufacturing highlights potential broader economic risks. - Historically, stock market crashes have led directly to recessions, which typically require substantial fiscal stimulus to reverse.
– On average, recessions since 1929 have demanded around 2.2% of GDP in stimulus, equating today to roughly $660 billion—nearly the amount the administration expects to generate from tariffs.
– Additionally, substantial capital investment—upwards of $6 trillion—would be needed to support the reshoring of manufacturing, underscoring the necessity for stable capital markets. - Interestingly, a client has suggested Trump’s ultimate objective could be securing a U.S. debt rating upgrade back to AAA status from Moody’s, aligning economic strength with political victory.
- Investor perceptions of Trump differ significantly between bond and stock markets, possibly due to political affiliations within these groups.
– Notably, bond markets lean Republican, whereas stock markets—and even more intensely hedge funds—lean Democratic.
– This division could explain the differential reactions to tariff-related news between these markets. - Wednesday is a critical day, with Tesla’s Q1 delivery results being closely monitored. Mark Newton notes $330 as a critical level for TSLA 7.65% ; sustaining gains beyond this would signal a significant upward move.
– Tesla’s performance bears watching as a case of the trump put being exercised
Bottom Line: Stay on target as there are 6 reasons Trump could want the market to rally post tariff announcement Wednesday
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Key incoming data April:
4/1 9:45 AM ET: Mar F S&P Global Manufacturing PMITame4/1 10:00 AM ET: Mar ISM Manufacturing PMITame4/1 10:00 AM ET: Feb JOLTS Job OpeningsTame- 4/2 10:00 AM ET: Feb F Durable Goods Orders MoM
- 4/3 8:30 AM ET: Feb Trade Balance
- 4/3 9:45 AM ET: Mar F S&P Global Services PMI
- 4/3 10:00 AM ET: Mar ISM Services PMI
- 4/4 8:30 AM ET: Mar Non-farm Payrolls
- 4/7 9:00 AM ET: Mar F Manheim Used Vehicle Index
- 4/8 6:00 AM ET: Mar Small Business Optimism Survey
- 4/9 2:00 PM ET: Mar FOMC Meeting Minutes
- 4/10 8:30 AM ET: Mar Core CPI MoM
- 4/11 8:30 AM ET: Mar Core PPI MoM
- 4/11 10:00 AM ET: Apr P U. Mich. 1yr Inf Exp
- 4/14 11:00 AM ET: Mar NYFed 1yr Inf Exp
- 4/15 8:30 AM ET: Apr Empire Manufacturing Survey
- 4/16 8:30 AM ET: Mar Retail Sales
- 4/16 10:00 AM ET: Apr NAHB Housing Market Index
- 4/16 4:00 PM ET: Feb Net TIC Flows
- 4/17 8:30 AM ET: Apr Philly Fed Business Outlook
- 4/17 9:00 AM ET: Apr M Manheim Used Vehicle Index
- 4/23 9:45 AM ET: Apr P S&P Global Services PMI
- 4/23 9:45 AM ET: Apr P S&P Global Manufacturing PMI
- 4/23 10:00 AM ET: Mar New Home Sales
- 4/23 2:00 PM ET: Apr Fed Releases Beige Book
- 4/24 8:30 AM ET: Mar P Durable Goods Orders MoM
- 4/24 8:30 AM ET: Mar Chicago Fed Nat Activity Index
- 4/24 10:00 AM ET: Mar Existing Home Sales
- 4/25 10:00 AM ET: Apr F U. Mich. 1yr Inf Exp
- 4/28 10:30 AM ET: Apr Dallas Fed Manuf. Activity Survey
- 4/29 9:00 AM ET: Feb S&P CS home price 20-City MoM
- 4/29 10:00 AM ET: Apr Conference Board Consumer Confidence
- 4/29 10:00 AM ET: Mar JOLTS Job Openings
- 4/30 8:30 AM ET: 1Q A GDP QoQ
- 4/30 8:30 AM ET: 1Q ECI QoQ
- 4/30 10:00 AM ET: Mar Core PCE MoM
Economic Data Performance Tracker 2025:
Economic Data Performance Tracker 2024:
Economic Data Performance Tracker 2023:
