Thoughtful Money with Adam Taggart Where Will Stocks Go Under Trump? Watch Passive Capital Flows | Mike Green
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Nov 14, 2024 Michael Green, chief strategist at Simplify Asset Management, shares his insights on the economic landscape under President Trump. He discusses the rising wealth inequality and the fiscal challenges shaping the U.S. economy. The conversation dives into how passive investing trends influence stock market behavior and the implications of Trump's policies on tariffs and immigration. Green highlights risks associated with market dynamics driven by automated systems and urges investors to reassess strategies amidst potential policy shifts.
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Markets Are Decoupled From Real Demand
- Passive investing has decoupled markets from underlying economic demand, inflating valuations independent of fundamentals.
- Global data (e.g., weak oil, China weakness) show aggregate demand is the real constraint, not asset prices.
China’s Trade Surplus Masks Weak Domestic Demand
- China shows a large trade surplus but weak internal consumption, revealing global demand imbalances.
- That producer role traps China and shifts pressure onto access to foreign customers and trade policy.
Use Tariffs To Rewire Supply Chains
- Treat tariffs as a negotiating lever to shift supply chains away from China rather than a pure revenue tool.
- Expect higher U.S. prices if sourcing shifts without corresponding increases in U.S. wages or investment.