Igniting a Selloff?

Trump is providing us with some action, both during his presidency, and even way before he got elected; During his campaign he touted protectionism, for example; saying that he will support imposing heavy tariffs on Mexico (25% on all imports), withdrawing the U.S from NAFTA (North American Free Trade Agreement) and Trans pacific partnership (which he did on the latter), and of course “build a big beautiful wall” across the southern border.

“Is this the real life? Is this just fantasy?”

Back in the 8th of November 2016, when the results of the U.S elections were out, the global markets as a whole was in a shock, investors surprised with the fact that Trump has won the elections, leaded to a global selloff. I could imagine us all of the investors around the world, singing Queen’s song The Bohemian rhapsody repeating the first 29 seconds of the song in a loop.

Indeed, investors got caught in a landslide, with the S&P 500 futures plunging in the aftermarket trading lower than 5%. All of that happened until Trump gave his victory speech pointing to a less hostility toward globalism. Day after, the S&P 500, and the other major indexes ended the trading day with more than 1% gains.

A Bumpy Ride

Although the market in general was steady in 2017, others had a bumpy ride; each time the White house signaled that it would impose tariffs on Mexico for example some stocks suffered great losses in market value. For example Constellation brands, a large scale of this company’s business is distributing Corona and other Mexican beer to the U.S. The notion of imposing 25% tariffs on all imports or eliminating NAFTA, made investors nervous and sparked selloffs.

2018 in my opinion

Last year was remarkable for investors as a whole, volatility was very low. And the S&P 500, ended the year with almost 20% gain.

I think this year will be way different, I don’t mean that the stock market will go down and no one can really know about that; yet you have to be extra careful with the stocks you pick. Experts are saying that the stock market isn’t in the “euphoria” mode yet, but i think that some stocks are already there. (Square for example)

The most important thing on Friday

Will the jobs report iginite a selloff? the unemployment rate is now at 4.1%, economists are expecting employers to add 200,000 jobs and more important wages to rise 2.8%.

This is important because if wages and adding jobs rise more than expected this could spark some fears among investors that the Fed will hike interest rates more than expected to prevent the economy from overheating.