Friday, April 6, 2018

Is Larry Kudlow the new market whisperer, or Trump's Baghdad Bob?

It has been a quite interesting week for the stock markets as they have experienced fierce movements both up and down dependent upon the rhetoric coming out of both the White House, and Beijing.  Yet perhaps the biggest catalyst of all for stocks came in the person of President Trump's new Economic Adviser Larry Kudlow, who aided at least two market reversals during interviews he gave this week in which he virtually stated over and over, 'everything is fine, nothing to see here'.

Some of President Donald Trump’s top officials on Wednesday sought to walk back the possibility of a trade war with China as markets jolted up and down most of the day. 
Perhaps the most soothing voice for investors and economists fretting over the possibility of a China-US trade war was Larry Kudlow, who replaced Gary Cohn last week as Trump’s top economic adviser. 
“There’s no trade war here,” Kudlow said on Fox Business. “What you’ve got is the early stages of a process which will include tariffs, comments on the tariffs, then ultimate decisions and negotiations. There’s already back channel talks going on.” 
Kudlow also told reporters on the White House lawn that “it’s possible” the tariffs will never actually be imposed. The proposed product list is currently open for comments and the US Trade Representative will review the comments until the end of May. 
Following Kudlow’s remarks, stocks rallied after tumbling to start of the day. The Dow Jones industrial average ended the day over 800 points above its low. – Business Insider
Since the U.S. and President Trump hold very little in ammunition to take on China in a trade war, especially since the Far Eastern economy can easily counter-attack by dumping hundreds of billions in Treasuries they hold or induce a nuclear option by no longer accepting dollars, perhaps the new economic adviser's primary role in the Trump administration is to act as the Market Whisperer, or better yet, as their own version of Baghdad Bob.

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