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  • Writer's pictureIshfaaq Peerally

The STOCK MARKET will NOT CRASH before 2021 ๐Ÿ“‰


Recently the yield curve further inverted and there are other signs of a recession coming. Recessions and bear markets always come together. I believe that the bear market will not come before the 2020 US Presidential election and, therefore, any crash will happen only after 2020. The reason for this hypothesis is Donald J. Trump, 45th president of the United States of America. He may act stupid sometimes but he is actually a genius who understands how markets work and how he can affect them with tweets. I recently read Donald Trump's book, The Art of the Deal. If you want to understand the man, his businesses and his presidency, you should definitely read this book.

What does Donald Trump want to achieve as president? Make America Great Again. It means he wants to decrease the trade deficit, create jobs, maintain a strong US Dollar $USDOLLA (but not too strong as it will adversely affect exporters) and most importantly keep the stock market at all time high. He famously tweeted in 2012 that if the Dow Jones $DJ30 falls by 1000 in two days, the president should be impeached,. Donald Trump is basing his reelection on the stock market being at all time high. But he also has to deal with China. Even in the Art of the Deal which was written in 1987 and even in that book he mentions that China doesn't trade fairly.

Therefore, Trump needs to have a balance between the trade war and the market at all time high. The market cannot be at all time high with a trade war. There are so many American companies dependent on China. The most important of them is Apple $AAPL . Apple makes their products in China and China is one of their largest markets. Apple needs good relations between the United States and China. Apple is also a black hole stock. Being the most profitable company in America and with so many investment funds holding Apple shares, if Apple falls, everything else falls. The Nasdaq100 $NSDQ100 index is 10% Apple while the S&P 500 $SPX500 is 3.5% Apple. Donal Trump knows how he can manipulate the market with tweets. With one tweet, he can crash the market and with another, he can send it to all time high again.

For example, on the 24th of December 2018, the S&P 500 $SPX500 was on the brink of entering a bear market. Donald Trump tweeted that stocks are so cheap that it is time to buy. Then, the recovery started. It was not a real recovery since the stock market has been moving sideways for over a year now. The same thing happened a few weeks ago. On the same day that the FED announces that they will lower interest rates, Donald Trump tweets that there will be new tariffs on Chinese goods.

Donald Trump is the greatest salesman in the world. He was able to make the FED lower interest rates. And with about 14 months before the elections, he will keep doing the same thing. Once he gets reelected, he doesn't have to fear a market crash anymore. The market will eventually recover before 2024 and he will claim that he was the greatest US president in history. He also can't keep the markets up artificially. Sooner or later, a crash will come. He is just postponing it for after the elections.

Once again, I'm telling that all of this is only a hypothesis. Don't base your investments on that. Just think about it.

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