Dividends and US markets as Trump quashes stimulus talks with Democrats

Prior to the election, President Trump communicated to the American public differently than the previous Presidents, the President tweeted a great deal. The former Presidents and maybe the new President Joe Biden used more formal communication methods – through the White House communications department. President Trump believed he was closer to the public by tweeting, but for the officials who sort out the details, Twitter messages had many fires to stop and occasionally sent markets up and down.

One example was the stimulus bill. In an article by Doina Chiacu and Richard Cowan of Reuters, President Trump in a tweet called off negotiations for the stimulus bill. The President wrote at my instructions, my representatives have stopped negotiation until after the election. The President wrote after the election we will pass a stimulus bill which focuses on hard working Americans and Small Business.

One might not think waiting another month for people who source of income is drying up is a good idea, but the President can negotiate the way he feels is best.

Wall Street analysts job is to determine what affect the action or inaction would have on the economy and the easy conclusion is spending would slow. The economy of the US depends on consumer spending and if people are concerned about when the next government assistance will come in, they will prioritize to housing, food, transportation and bills. The expenditures will have to wait.

The real reason why the stimulus bill is taking so long was a different idea of whether the economy should be wide open or closed. In some states the idea was to be open, in other states open a little and other states where COVID is higher closed down. If the economy is closed, then people can not meet in groups and many industries depend on people gathering. If people can not gather then some form of stimulus is needed.

Linking to dividend paying stocks, what the President says and does not say matters to analysts. In the form of open communication means everyone can see the information and determine if it is good, bad or neutral and adjust to your determination. One hopes that the President can see both the short and long term as you invest.

There are more questions than answers, till the next time – to raising questions.

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