Day 84: Trump Flexes Military Muscle, Causes More Uncertainty

This week, Trump made military moves on two fronts, positioning ships off the coast of North Korea, and firing missiles into a key target in Syria. These quick, emotional moves sent ripples throughout the world markets. Uncertainty in the economy has been further amplified by an ever-extending timeline for tax reform.

Global Political Climate on Edge After Syria Strike

• Tensions with Moscow were at a high point following the US strike against Syira’s self-inflicted gas attack, according to Bloomberg.
• The attack was initiated as more of a warning than a major strategy change.
• Russia had harsh words. A spokesperson stated the US “is the most unpredictable state.”

Officials have stated that the strike from the US was retaliation for using horrifying gas weapons, but did not plan on further strikes or military involvement unless provoked in that way again. The damage and political waves have already been made, however, as the US condemned Russia for not doing a better job of clearing the dangerous sarin gas weapons out of Assad’s hands.

Russia in return called the US strike an “act of aggression against a sovereign state.” These words put a damper that Trump might be the bridge to create a more positive environment with Russia. It seems there are more uncertain and thin ice encounters to be expected in the Trump era.

Trump Sends Warships Near N. Korea & Considers More Sanctions

• North Korea was a hot topic during Trump’s talks with President Xi Jinping of China, according to Fox News.
• The USS Carl Vinson aircraft carrier group just so happened to make way near North Korea at about the same time.
• US officials are currently considering plans for future sanctions, if they refuse to stop nuclear development.

The US has already made sanctions as recently as last month against North Korea. In those sanctions against companies aiding the proliferation of weapons, the Secretary of the Treasury Mnuchin said, “Today’s sanctions are aimed at disrupting the networks and methods that the Government of North Korea employs to fund its unlawful nuclear, ballistic missile, and proliferation programs.”

Administration officials have made it clear that they’re prepared to tighten their grip even more if North Korea doesn’t get with the program. According to a White House official, they’re exploring a range of diplomatic, security and economic sanctions to leverage against the communist nation if things go further south. It seems political unrest can’t be escaped, no matter which side of the world you’re on.

Make America Lower its Expectations Again

• Reality seems to be striking back against stock market optimism in the past few weeks, according to CNN Money.
• Investors seem to be slowly diverting towards safe havens like gold, which was up 7% since the beginning of March.
• Bond yields are also down .32%, a significant decline during the same time frame.

The list of disappointments is growing for the markets, following their optimistic upward climb after Trump’s election. His plan to repeal and replace Obamacare fell flat, and seemingly was taken off the table for the long term. That was until Tuesday when Trump changed his mind, stating “I have to do health care first.” These confusing flip flops are proving hard for the markets to keep up with and adjust against.

On top of the health care blunder and general military issues arising this week, the “big tax reforms” that had many hopeful of a bigger recovery seems to be far delayed. Press Secretary Sean Spicer mentioned that anything happening before August would simply be wishful thinking at this point. It turns out there’s not a lot of bite to the president’s big plans to revitalize the US economy, at least not yet.

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