Politicians who crow about stock market gains face hazard when market drops

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The White House said today that President Donald Trump was focused on the long-term health of the economy, claiming the fundamentals were "exceptionally strong", despite a strong market sell-off.

White House press secretary Sarah Huckabee Sanders issued a statement Monday in response to a historic Dow Jones industrial average plunge, which resulted in the biggest one-day point drop in the stock index's history.

While there is still reason for optimism, Colas said investors are also unsettled by questions over the unintended consequences of the USA tax cuts, which include higher federal debt and handing more money to consumers at a time "when the U.S. economy is close to full capacity".

Wall Street stocks endured a brutal first session of the week, with the Dow seeing its steepest ever one-day point drop, wiping 4.6 per cent off the value of America's 30 largest companies.

Pressed ahead of Trump's speech about the stock market losses, White House deputy press secretary Raj Shah acknowledged "markets do fluctuate in the short term, I think we all know that". And it never made sense for Trump to take credit for a stock market that has been gaining steadily since it recovered from the financial collapse of 2008. But that didn't stop Trump from pretending in recent speeches that he presided over a jobs boom.

Trump has repeatedly touted stock market rallies throughout the 13 months of his presidency, but did not say anything about the downturn in the stock market.

Three days before that, he tweeted, "Dow just crashes through 25,000".

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At the same time, he said policies Trump supported and Republicans in Congress approved are stimulating the economy.

Stock market analysis is even more primitive than political analysis, and shares its false sense of certainty.

It closed the day down 4.6%, or 1,175 points.

The S&P 500 rose 34 percent from Trump's election to its recent high. "Big cuts in unnecessary regulations continuing".

Still, as the stock market was rapidly dropping, Trump was delivering a speech in OH at a manufacturing company, touting higher wages and the return of jobs back to America.

The benchmark S&P 500 has pulled back more than 6 percent from a January 26 record high.

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