Trump Says `Big Mistake' to Sell Off Stocks in Good Economy
Donald Trump has some advice for investors: they’re making a “big mistake” by selling off stocks.
(Bloomberg) -- President Donald Trump has some advice for investors: they’re making a “big mistake” by selling off stocks amid good economic news.
“In the ‘old days,’ when good news was reported, the Stock Market would go up. Today, when good news is reported, the Stock Market goes down,” Trump said on Twitter. “Big mistake, and we have so much good (great) news about the economy!”
The statement was the first by the president about the U.S. stock market since a dramatic swoon that began Friday, following the release of a Labor Department report showing rising wages and lower-than-expected unemployment. The news prompted investor concern that the economic growth could fuel inflation and lead the Federal Reserve to raise interest rates.
Trump has regularly boasted about the market rally since his election as proof of his success in office. Recent gyrations have highlighted the political risk Trump runs tying his presidency too closely to a bull market.
The U.S. stock market remained fragile Wednesday, with shares fluctuating and volatility measures double levels from last week. The Dow Jones Industrial Average and S&P 500 Index both rose after opening slightly lower.
Trump administration officials have insisted that they’re not worried about the recent turbulence, including a record 1,175-point fall in the Dow on Monday. Treasury Secretary Steven Mnuchin said Tuesday he was "not overly concerned" about a short-term selloff and believed that markets were "functioning very well."
"I think the fundamentals are quite strong," Mnuchin said at a hearing of the House Financial Services Committee.
Still, the dramatic market swing set off a frenzy of activity among the president’s economic aides. Kevin Hassett, the chairman of the Council of Economic Advisers, told CNN on Tuesday night that he, along with Mnuchin and White House chief economic adviser Gary Cohn, "have been in constant contact with financial regulators."
Other U.S. officials sought to depict the turbulence as normal. Jay Clayton, who heads the Securities and Exchange Commission, told lawmakers Tuesday that the previous day’s decline didn’t signal a systemic risk.
“There is nothing to indicate that any of our systems didn’t function as they were expected to function yesterday,” Clayton told the Senate Banking Committee. “As I sit here today, there’s nothing that came out that concerns me from a functioning standpoint.”
Meanwhile, Commodity Futures Trading Commission Chairman J. Christopher Giancarlo said that the derivatives markets his agency oversees also functioned properly.
Giancarlo will meet with Trump Wednesday at the White House, the first time Giancarlo has had an official session with the president since he took over as chairman. The meeting has been long scheduled and the president will receive an update on the CFTC’s agenda, according to a White House official who requested anonymity to discuss the private gathering.
Monday’s selloff -- the biggest drop in Dow points ever and greatest percentage decline in more than six years -- intensified just as the president was recounting “a tidal wave of good news” about the economy in a speech in Ohio.
White House press secretary Sarah Huckabee Sanders on Tuesday defended the president’s decision to take credit for successes in the stock market, saying the nation’s economy was "infinitely better off today than where we were before the president took office."
"Does the President have second thoughts about taking credit for a booming economy? Absolutely not," she said.
To contact the reporter on this story: Justin Sink in Washington at jsink1@bloomberg.net.
To contact the editors responsible for this story: Alex Wayne at awayne3@bloomberg.net, Joshua Gallu, Mike Dorning
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