After giving Trump some credit, the article goes on....
But that shouldn’t let Trump off the hook. While markets, like wayward elephants, do tend to have minds of their own, it’s also possible to identify specific ways in which Trump has contributed to the downturn. His prosecution of the trade war with China, in particular, has rattled investors. The 90-day truce between the two nations, agreed upon at the Group of 20 summit in Buenos Aires on Dec. 1, has done little to buoy the stock market because investors realize that hostilities could erupt again when the cease-fire ends in March. The S&P 500 price-earnings ratio has fallen 13 percent since September. Trump, in general, was the No.?1 thing keeping institutional investors awake at night in a mid-December survey by investment bank RBC Capital Markets.
Trump’s Twitter attacks on Powell could also be backfiring. Even some market analysts who think the Fed should back off from raising interest rates say that the president’s messaging could induce Powell to demonstrate his independence by forging ahead with unnecessary hikes. Or, for bond investors worried that the Fed will accede to the president, there’s an expectation of accelerating inflation. That would cause bond prices to fall—which generally causes stock prices to fall as well.
Trump’s leadership style is also wearing poorly. His strategy of keeping people guessing and off balance might work well with adversaries, but it alienates friends. “I’m not aware of another U.S. president trying to weaponize uncertainty. And for good reason: It harms American interests as well as foreign ones,” says Steven Davis, a professor at Booth who helped develop an economic policy uncertainty index. (The news-based version of the uncertainty index is just below the top 10th of its 34-year range of values.)
It’s true that the stock market isn’t the best metric for judging a president. Stocks can go up even if the president is performing badly and down even if he’s doing well. For example, just because getting tough on China is bad for some tech stocks doesn’t mean it’s the wrong thing to do. Conversely, many of the things that are most troublesome about Trump don’t show up in stock indexes—the coarsening of the public discourse, the damage to America’s global alliances. And some potentially harmful actions, such as trying to weaken rules on mercury emissions from coal plants, could boost certain stocks.
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