President Donald Trump inherited a fairly robust economy with the lowest jobless rate in nearly a decade, record home and stock prices and a healthy growth rate. But his agenda is so wrong that even Wall Street is getting spooked.
The Dow Jones industrial average fell about 145 points on Monday as Trump’s approval rating is going down the toilet.
U.S. stocks began the week on the wrong foot, trading sharply lower on Monday, with Goldman Sachs contributing the most losses, MSNBC reported.
Financials were dragged by bank stocks, as the SPDR S&P Bank ETF (KBE) and the Regional Banking ETF (KRE) both fell more than 2 percent.
The Nasdaq composite dropped 0.6 percent after briefly falling 1 percent.
The 30-stock index was also on track to post an eight-session losing streak, according to the report.
“I don’t think this is the beginning of a full-blown crisis, but it’s definitely a reversal in market sentiment,” said Peter Cardillo, chief market economist at First Standard Financial.
Trump had said the repeal and replacement of Obamacare must happen before action can be taken on his other plans, including a major tax reduction. But Trump was dealt a major defeat after a House bill aimed at replacing Obamacare was pulled from the floor on Friday.
Stocks have rallied significantly since the U.S. election on hopes of lower taxes, deregulation and fiscal stimulus, but after a series of scandals and missteps by the Trump administration, confidence has dwindled to trickle.
Here’s how the stock market is responding, according to MSNBC:
The U.S. dollar declined to a four-month low against a basket of major currencies, with the euro near $1.09 and the yen around 110.2.
Overseas markets also faced pressure following the American Health Care Act’s defeat, with the pan-European Stoxx 600 index falling 0.75 percent.
The Dow Jones industrial average fell 145 points, or 0.68 percent, to 20,451, with Goldman Sachs lagging and Coca-Cola leading advancers.
The S&P 500 dropped 18 points, or 0.84 percent, to 2,323, with financials leading nine sectors lower and utilities and real estate the only advancers.
The Nasdaq composite declined 55 points, or 0.94 percent, to 5,774.
One key element at the epicenter of the sudden slide is immigration.
Economists disagree on a lot of issues, but immigration is not one of them. They are seeing the clearly detrimental impact Trump’s immigration orders are already having on economic growth.
Almost unequivocally, experts from the left and the right ends of the political spectrum see immigration as a net benefit to the economy. They cite everything from population growth to increased tax receipts to diversity of people and ideas.
Jan Hatzius, chief economist at Goldman, examined the key Trump policy proposals — higher tariffs on trade, curbing illegal immigration, increased federal stimulus, tax cuts for corporations — and found that it would be a drag on global growth.
“Immigration has been an important source of labor-force growth. So slowing the pace of immigration probably would slow the growth rate of the economy,” he said.
Doug Holtz-Eakin, president of the American Action Forum and chief economic policy, was blunt in his assessment of Trump’s policies: “It is harming the U.S. economy,” he said. “Immigration is an enormous source of economic vitality.”