Before reading this article please make a mental note about our audiovisual presentation – Trump the “Game Theory” False Court Jester – it is both entertaining and informative.
Despite the S&P 500 and the Dow breaking down as a result of comments by President Donald Trump that the so-called “threats” were not that at all, he said would surely raise tariffs on $325 billion in goods. Now we have talked and made video presentations about advanced game theory techniques employed by the Trump team that truly are legitimate. Trump knows that international trade is rules based which means that the introduction of disorder and confusion can help win an asymmetrical platform or playing field.
So when he fired this latest round of tariff comments at the Chinese Vice Premier Liu, we knew that Trump was following script that he and his team carefully put together. Some people have challenged us on this – but think about it, do you really think Trump walking out on Kim Jong-un in Hanoi at the summit was just a reaction or a spontaneous decision? We think it was scripted, catching the North Korean delegation off balance. So these recent comments about tariffs are again, likely scripted with well timed execution.
So President Trump fires shots in a trade war, and the Dow falls more than 470 points then slowly climbs back, ending the day 67 points off. The Dow closed at 26,437 and S&P 500 was down 13 at 2,932. This was the biggest opening gap for the S&P 500 since January 2. But note that much of the optimism that gave the S&P 500 a 17% boost since the start of the year came from expectations of a positive result on China Trade Talks and the easy Fed stance. Look for more shots fired from the US and a smart and strong stance by China – keep in mind that China wants to do all it can to move these talks forward but they too are not in a hurry.
We have another audiovisual presentation coming out later this week, will call it to your attention.