Washington(CNN) President Donald Trump on Wednesday downplayed last month’s stock market rout — a dive that led to the worst December since the Great Depression — as a “little glitch.”
But the President, who took credit for the stock market’s upward swing and closely watches the market as a measure of his performance, has privately fretted about the downturn, which he fears could undercut his 2020 re-election bid.
“We had a little glitch in the stock market last month,” Trump said during a Cabinet meeting on Wednesday.
He added that the market is still higher than when he came into office.
“It’s still up, I guess about 30%, from the time I got elected,” Trump said. The Dow closed at 18,332 on November 8, 2016, and was up about 27% to 23,348 on Wednesday.
The jittery stock market in 2018 suffered its worst losses since 2008, leaving the President fuming about the Federal Reserve’s interest rate hikes and repeatedly attacking the chairman he picked, former investment banker Jerome Powell.
The President and his economic advisers’ frustration with the Federal Reserve is running “extremely high,” said one source close to the White House.
“Everyone is nervous about the stock market,” the source added of the mood among the President’s economic advisers.
Trump and his top aides are pining for a win to settle markets. With the Fed out of his control, Trump has set his sights on overcoming the impasse on trade with China.
“The trade deals we’re making for our country are fantastic,” he said on Wednesday.
The US economy remains strong, with unemployment near record lows and job growth steady, but economists expect a slowdown in 2019 that could escalate into a full-blown recession heading into 2020.
An announcement late Wednesday from Apple that the tech giant missed quarterly revenue targets by several billion dollars due to “lower than anticipated” iPhone sales in China was the latest signal of a global slowdown, with Apple CEO Tim Cook describing the situation in China as an “economic deceleration.”
That could increase the pressure on Trump and his negotiators to close a deal with Beijig and end the trade war he set off last year by imposing tariffs on billions of dollars in Chinese imports.
Trump and Chinese President Xi Jinping agreed last month to a 90-day truce in the trade war. While the Chinese have indicated a willingness to increase their purchases of US goods, some Trump administration officials remain skeptical that China will be willing to make the structural reforms necessary to tackle the core issue of the trade imbalance between the two countries.
But some White House advisers now worry that the US stock market downturn — and Trump’s anxiety over its impact on his re-election chances — could embolden the Chinese and make them less willing to make concessions.
The Dow has grown increasingly volatile in the past year, swinging more than 1,000 points on five days in 2018 — something that’s happened only eight times in the history of the exchange.
The Dow closed down 8.7% for all of December, the worst record for the month since 1931, when Herbert Hoover was president. In one seven-day stretch, it fell by 350 points or more six times.
That included the record-setting Christmas Eve slide, when markets fell in part because of Treasury Secretary Steven Mnuchin’s surprise announcement that he was interrupting his vacation in Mexico and calling major bank CEOs to gauge liquidity amid the partial government shutdown — a risk the markets hadn’t been concerned about.
Stocks remain far more volatile than indicators like business investment and unemployment, for example, driven by the vagaries of earnings seasons and currency fluctuations. However, Americans tend to see the major indices as a leading indicator of how businesses are doing, and adjust their views of their own personal finances accordingly.
A 1999 study by an economist at the Federal Reserve Board found that this isn’t because the stock market actually influences most consumers’ net worth, but rather because they used it as a yardstick of how much they’re likely to earn in the near future.
Only about 17% of Americans own stocks directly, while about half are invested through their retirement accounts, according to the Pew Charitable Trusts.
There are signs that the volatility is creating hesitance. Last week, the Conference Board’s consumer confidence index posted its largest drop since July 2015.
A measure of business uncertainty developed by the Federal Reserve Board of Atlanta has been rising all year, likely driven by tariffs, slowing growth, and political conflict. In December, business’ expectations of their own future growth dropped sharply.
When the stock market was soaring during the first year of his presidency, Trump frequently touted the numbers as a marker of a strong economy and the success of his policies.
Trump has lately turned to other measures, including low gas prices.
While he acknowledged the market downturn Wednesday, Trump touted the “strong economy” in the US and pointed to the prospect of more trade deals on the horizon, including with China, and appeared to promise a stock market recovery.
“It’s got a long way to go, tremendous amount to go,” the President said.
CNN’s Matt Egan and David Goldman contributed to this report.
Read More: Trump downplays stock market swings amid growing economic anxiety