CNBC’s Jim Cramer warns that stock-market investors could be in trouble if President Donald Trump continues to mistreat U.S. businesses in the same way President Barack Obama did.
“Wall Street didn’t exactly view Obama as pro-business,” due to the former president’s tough regulatory stance, CNBC.com quoted Cramer as saying.
“For whatever reason, the president’s whims have trumped his pro-business attitude — he’s anti-business. And if the Trump administration is going to be less pro-business, investors are going to pay,” Cramer said. “Put it all together, you can understand why this market has been hammered for the past five weeks,” Cramer said.
“It’s telling that the S&P 500 is the same valuation that it had in Obama’s second term. Even though long-term interest rates are a lot lower than they were in 2013,” Cramer said.
“It’s possible that President Trump has realized something that Obama discovered when he was running for his second term: Most voters don’t own stocks anymore,” Cramer said.
To be sure, Trump didn’t tweet once about the volatile stock market in May, Yahoo Finance explained. Trump's last tweet on stocks came on April 23, when he shouted out the market nearing a record high, Yahoo said.
“The market was blindsided by this — this is not good for the markets,” Tom Essaye, president of Sevens Report Research, told Yahoo Finance.
Meanwhile, U.S. stocks fell broadly on Friday, hit by fears that Trump’s shock threat of tariffs on Mexico could prove the trigger that pushes the world’s largest economy into recession, Reuters explained.
Washington will impose a 5% tariff from June 10, which would then rise steadily to 25% until illegal immigration across the southern border was stopped, Trump tweeted later on Thursday. Mexican President Andres Manuel Lopez Obrador said he would respond with “great prudence”.
“It is a very sticky situation,” said Art Hogan, chief market strategist at National Securities in New York.
“American companies needed to find supply chains outside of China when it looked like the (U.S.-China) trade deal is going to take much longer and one of those countries that was pointed to outside the Pacific was Mexico.”