And That’s the Way It Is

This has been yet another week in which events transpired that profoundly influenced the financial landscape. It seems as though volatility and uncertainty have become intrinsic outcomes of statements recently made by those that run our country.

The hawkish testimony on Tuesday to Congress by newly appointed Federal Reserve Chairman Jerome Powell resulted in a dynamic selloff in U.S. equities. This was followed up on later in the week when President Trump proposed the implementation of tariffs on steel and aluminum.

These two events had a net effect on the Dow Jones Industrial Average of a 1000-point decline in trading this week.

No matter how you feel about our current president there is one undeniable fact: since his inauguration, the Dow has climbed from 18,000 to a high above 26,000 in a little over a year.

It seems no matter what he said and how much his statements divided the country, they did not have a negative impact on the financial markets. However, that changed this week when he proposed a tariff on steel and aluminum.

Such a proposal, if implemented, would most likely create a trade war. The majority of economists believe this would have a profoundly negative impact on the global economy.

In response to those criticisms, President Trump tweeted today that “trade wars are good and easy to win.”

It is during a week like this that many of us wish for an explanation that can make sense of the events that have transpired. We need the clarity of a news anchor like Walter Cronkite.

Walter Cronkite, the legendary anchorman for the CBS Evening News, was able to report the daily news with honesty, impartiality, and levelheadedness that seems to be nearly absent in today’s 24-hour partisan news.

For those of us old enough to remember his broadcasts, we remember a news anchor who was able to bring a calming demeanor to some of the more chaotic events of his time. He was considered “the most trusted man in America.”

His traditional signoff for each of his broadcasts was “and that’s the way it is.” This signoff is appropriate this week because even if there no words to eloquently make sense of the events and their potential repercussions, we still need calm amongst the chaos.

In the absence of an explanation, we can gain some solace knowing “And that’s the way it is”  Friday, March 2^nd, 2018.

Wishing you as always, good trading,