Wall Street Traders Embrace the ‘TACO Trade’ To Cope With Trump’s Ever-Evolving Trade Policy

Wall Street investors are embracing a new sardonic acronym to describe President Trump’s ever-changing trade policy — the TACO trade.No, it’s not about Taco Bell or the president’s predilection for fast food: The acronym stands for “Trump Always Chickens Out.”The term captures what has become an ever-widening trend: Mr. Trump threatens to apply steep tariffs across the world, the markets in the United States take a deep dive, then the president “chickens out” and delays the tariffs, causing the markets to skyrocket anew.Take last week: Mr. Trump announced he would apply 50 percent tariffs on all goods coming from Europe. The Dow Jones Industrial Average lost 256.02 points, while the S&P 500 shed 0.67 percent and the Nasdaq Composite dropped 1 percent following the announcement.Then on Sunday, the White House announced it would pause the harsh new tariffs until July 9, saying talks were under way with a number of nations. After the markets were closed for Memorial Day, the Dow soared more than 721 points on Tuesday, while the S&P 500 climbed 2.1 percent and Nasdaq jumped 2.5 percent.“This is a positive event, and I hope that they will, FINALLY, like my same demand to China, open up the European Nations for Trade with the United States of America,” Mr. Trump wrote Tuesday in a post on Truth Social.Happy #CincoDeMayo! The best taco bowls are made in Trump Tower Grill. I love Hispanics! https://t.co/ufoTeQd8yA pic.twitter.com/k01Mc6CuDI— Donald J. Trump (@realDonaldTrump) May 5, 2016Some investors say they are getting behind the TACO trade strategy, according to the New York Post.“Once he delivers bad news, investors are buying those stocks when they are beaten down waiting for him to chicken out and watching those stocks rebound in value,” the president of Exit Stage Left Advisors, Ted Jenkin, told the outlet.“Investors have kind of figured Trump out a little bit,” a senior wealth adviser and market strategist, Paul Nolte, at Murphy and Sylvest in Elmhurst, Illinois, said. “He’s like the poker player at the table that you know is making some bets, and then when pressed by the other players at the table, he folds.”The TACO trade is a lucrative one so far. Mr. Trump sent stocks plummeting in April when he announced his “Liberation Day” tariffs, but then just a week later he put those on hold as well, sending stocks soaring. The same thing happened when the president threatened triple-digit tariffs on China, then backed off.Market economist David Rosenberg of Rosenberg Research summed it up in a note on Wednesday. “The question is, at what point will the President’s credibility become impaired because you only get so many tries at kicking the tariff can down the road,” he said, according to MarketWatch. “As for the markets, they are playing the role of dog in President Trump’s impersonation of Ivan Pavlov.”Mr. Trump on Wednesday was asked by a reporter in the Oval Office about the new TACO acronym.“I’ve never heard that. You mean because I reduced China from 145 percent that I set down to 100, and then down to another number, and I said you have to open up your whole country?” the clearly annoyed president said. “And because I gave the European Union a 50 percent tariff and they called up and said, ‘Please let’s meet right now.’ You call that chickening out?”He then dressed down the reporter, saying: “But don’t ever say what you said. That’s a nasty question. To me, that’s the nastiest question.”

Wall Street Traders Embrace the ‘TACO Trade’ To Cope With Trump’s Ever-Evolving Trade Policy

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