/Dow Tiptoes Sideways While Trump Savages Fed Boneheads – CCN.com

Dow Tiptoes Sideways While Trump Savages Fed Boneheads – CCN.com

The Dow tiptoed lower on Wednesday, putting its five-day winning streak at risk while President Donald Trump intensified his one-sided war of words with the “Boneheads” at the Federal Reserve.

Dow Huffs & Puffs Toward First Loss in 6 Sessions

The stock market’s last few sessions haven’t been spectacular, but they’ve been sufficiently bullish to keep the Dow Jones Industrial Average winning streak alive. On Wednesday, the Dow ticked down 11.16 points or 0.04% to 26,898.27.

The index is now struggling to record its sixth straight advance and creep closer to its all-time high, which rests just below 27,400.

dow jones industrial average chart
dow jones industrial average chart
The Dow ticked higher at the opening bell, only to slide back below its previous close. | Source: Yahoo Finance

The S&P 500 dipped 2.6 points or 0.09% to 2,976.47.

The Nasdaq was mostly flat, adding 1.77 points or 0.02% to edge higher to 8,085.93.

Trump’s Twitter Antics Overshadow Tariff Exemptions

The Dow and its fellow indices benefited from a healthy dose of trade war optimism. Most notably, China announced that it would waive tariffs on 16 US goods for 12 months, beginning on September 17.

This is the first time Beijing has issued tariff exemptions for US products since the trade war began last year, and it precedes an important round of top-level trade negotiations that insiders believe could lead to a “breakthrough.”

However, President Trump continues to domineer Wall Street’s attention, first by firing National Security Advisor John Bolton, and then by launching a new attack against his “enemy” at the Federal Reserve, Jerome Powell.

Writing on Twitter this morning, Trump savaged the “Boneheads” at the Fed who are missing out on a “once in a lifetime opportunity” to slash rates all the way into negative territory and then leverage those rates to refinance the national debt.

According to CME’s FedWatch Tool, the market overwhelmingly expects the Fed to cut its benchmark target by 25-basis points to 1.75% to 2.00% at its policy meeting next week. However, the probability of the Fed maintaining its current target has climbed above 10% from 0% one month ago. The probability of a 50-basis point cut has declined to 0%.

Trump has long made the Federal Reserve a scapegoat on which to hang both slowing economic growth and stock market struggles. On multiple occasions, he has alleged that the Dow would be 10,000 points higher if the Fed “knew what it was doing.”

Will Trump Tweet the Stock Market Into Decline?

Speaking of Trump’s Twitter feed, it’s flashing an unconventional warning that could portend an end to the Dow’s five-day winning streak.

As CCN reported, Bank of America Merrill Lynch research found that the S&P 500 incurs an average loss of 9 basis points on days when Trump unleashes 35 or more tweets. That’s compared to an average gain of 5 basis points when he tweets five or fewer times.

Trump has not exceeded the 35-tweet threshold during the Dow’s current daily winning streak. However, according to Trackalytics, he has already tweeted 32 times today.

Click here for a live Dow Jones Industrial Average chart.

Last modified (UTC): September 11, 2019 1:39 PM