All the economic gifts that Trump is waiting to receive are still wrapped, and he does not know whether he will like him or not, but time will reveal that.
There is good news for him like:
The Federal Reserve cut interest rates 3 times this year, with a total of 75 basis points.
Reaching the first stage of the trade agreement, and Trump announced the last announcement of signing the trade agreement in Washington, and this is what China has neither confirmed nor denied.
He also has a new NAFTA agreement.
However, there are still larger unresolved issues:
What will segregation lead to?
Is Trump re-elected?
Will Wall Street continue to perform its powerfully revolutionary performance in 2020?
We saw the US job market shine this year, with unemployment rates remaining below 4%, economic growth at 2%, but will this help Trump?
And if Trump really hopes to be re-elected, they must beat the final Democratic candidate, and in his pursuit of this the stock markets should continue to record levels, and growth continues to rise, especially in the industrial sector from the Midwest. This is what we see farfetched.
“I don’t think growth will return to acceleration in 2020,” said Mark Zandi, chief economist at Moody Analytics. “The recession is no longer a possibility now thanks to the truce, but this is not enough to push growth up.” If the economy continues at 2%, then all sides of the equation are tied, and Trump guarantees victory. But if things change, especially in the industrial states, with economic weakness, those states will turn against Trump in favor of the Democrats.
The White House and Republicans look at the market with a different eye. They see the new deal between the United States, Mexico and Canada, and the “first-stage” partial agreement between the United States and China, as strengths that Trump will win. These agreements stimulate stagnant capital spending, raise the industry sector, and allow Trump to win by the electoral college, which will keep the western western states in blue (i.e. vote for the Republican). They also talk about Trump 2.0 tax plan.
“As long as the recession has disappeared, I think Trump is doing well,” says Stephen Moore, a conservative economist and Trump’s external adviser. “But if the growth is stronger, he’s really in good shape.” “I think growth will be at 2.5% to 3.0%. And the last two weeks have been good for Trump, with the new NAFTA agreement and the trade deal. They cannot come at a better time than the current time,” he says.
As we head towards the end of the year, here are 3 things that can affect the economy, the stock market, and act in or against Trump’s favor:
Industry sector, is witnessing a recovery?
The biggest threat to Trump at the moment is the continued decline in industrial indicators, as the impact of trade war on this aspect is strongly demonstrated. The manufacturing sector entered a recession during the summer, and it has yet to fully emerge from it, which has caused economic weakness in the states that Trump needs to win the victory in 2020. In states such as Pennsylvania, the unemployment rate rose to a high, recording 4.2% in October. .
As for Michigan, it also suffers from unemployment rates above average, at 4.1%, and witnessed a decline in the manufacturing sector during the months of September and October. However, it is worth noting that this decline occurred in the months of the GM (NYSE: GM) strike that has now ended.
We saw Trump decide not to impose additional tariffs on China, but does this decision have the potential to shift the trajectory of the slide in the manufacturing sector? It is worth noting that this manufacturing sector does not represent a huge segment of the American economy, but it is an essential element to make America great again, according to Trump’s electoral slogan.
We saw China demanding in advance that all tariffs be dropped, because tariffs are what started the war, and they are the ones that announce their end. But the Trump administration has kept tariffs at 12.5% and 25% on Chinese imports, and is said to be vulnerable to a phasing out. However, you should pay attention to the Chinese coolness over the agreement.
“I don’t think of sustainable change, unless the cloud of uncertainty about trade disputes is removed entirely,” says Rubella Farooqi, chief economist of High friction economics. “There is only one positive thing here, and it is: there is no possibility to impose further tariffs, but I personally do not think it is completely over.”
Farooqi indicated that capital spending looks positive, given the federal surveys of Philadelphia and the Empire State. However, it is unclear whether capital spending will reach the desired height for the White House.
Manufacturing was also hit hard by Boeing’s decision to shut down the production of the Max 737, after strong security concerns. Boeing is a large part of the US manufacturing sector, and will be hit hard by production and supply chains.
In a currency note, Joe Brosolas, an economist from RSM, says stopping production of the 737 will cut economic growth by half a percentage point in the first quarter.
Today, we saw the Chicago Manufacturing PMI decline for the fourth consecutive month, registering 48.9, which is better than its expectations for 48.2, but last month’s reading was revised to 46.3. Also, this is still below the 50 mark of economic expansion.
Is the stock market continues to rise?
Trump likes to brag about record stock market shares, and Trump has tweeted about this since he took office in 2017. He is right about the stock market making record profits, with the Dow Jones rising 50% since his election in November 2016 (this is his preferred time frame).
Market specialists say Trump’s corporate taxes, the energy sector’s exit from the agenda of some regulators, financial services, and other industries, have reaped a lot of profit. However, let us mention the whole truth