By Isaac Cohen*
The markets fell again last week, after the announcement by President Donald Trump of tariffs against imports of steel and aluminum. With this second plunge, in less than a month, some analysts see the final stage of the rally, which celebrated its ninth anniversary on March 9 and that is already the second longest in Wall Street history.
The market peaked on January 27 and was followed by a 10 percent correction in February, resulting from the approval of tax cuts, a budget with abundant red ink and the presentation of an infrastructure plan. These measures were perceived as indicative of inflation, because the government is stimulating an economy that has reached full employment. A market rebound followed in March, until the announcement of the protectionist tariffs led to another fall, due to concerns about trade wars against both allies and adversaries.
Market optimism prevailed during President Trump’s first year, based on the promise of tax cuts, less regulation and infrastructure spending. The turn towards protectionism has brought forward other less encouraging campaign promises which remained wishfully ignored.
*International analyst and consultant, former Director ECLAC Washington Commentator on economic and financial issues for CNN en Español TV and radio, UNIVISION, TELEMUNDO and other media.
