After numerous days of positive finishes for US stocks, market indexes in the States have headed into negative territory. Why is this so?

President Trump has resumed his ‘Mad King’ persona that he last imposed on us when he delivered his so-called Liberation Day tariffs that led to a convulsive market reaction. After numerous days of positive finishes for US stocks, which included a nice Santa Claus rally, market indexes in the States have headed into negative territory.

Our stock market will find it hard to resist the gravitational pull of a series of Trump actions and threats. The US President will have to give one of his clarifications of the reality that’s more likely to eventuate, or else markets could go negative for some time.

Remember, US stocks are often determined for the year based on what January ultimately spits out. And given the historical cuteness of American labelling, the January Effect says, “as goes January, so goes the year.”

We are getting used to Donald Trump’s ways, and in a world of psychopathic leaders of countries such as Russia and China (and let’s not ignore some of the Middle East crowd), the West has to accept that Donald is our ‘psychopath’. Sometimes you have to fight fire with the same substance.

However, when I think of the bombastic approach Trump leads with that unsettled financial markets overnight, I can’t help but contrast his personality with the world’s number 2 tennis player. I had the pleasure of hearing Jannick Sinner interviewed for an AO-related function in Melbourne last night for the Explora cruising operation (Sinner is an ambassador for this luxury liner).

When watching Sinner play, I’ve always admired his demeanour and talent on court, but I’ve never listened to him discuss his early life, his family and how he copes with the pressure of playing the best at the highest level.

This is a 24-year-old that any parent would be proud to call a son. His attitude is potentially a great lesson for any person looking for how to create a winning composed persona.

Leaders could learn a lot from Sinner, though I don’t think Donald is about to embrace Jannick’s more contemplative and composed style. No, our American ‘saint’, who’s having a huge impact on the US and global economy as well as financial markets right now, isn’t likely to become a sinner of a Jannick kind. He’s more likely to remain a sinner until financial markets make him repent.

So, what were the sins he committed overnight that have hurt stock prices? Here goes:

1. He keeps hounding US central bank boss Jerome Powell accusing him of lying, and now the world’s central bankers are riding to their colleague’s defence. Overnight Trump called him “incompetent” or “crooked”.
2. Markets can’t ignore the potential independence reduction of the Federal Reserve, with Trump clearly ‘playing the man’ on what many regard as a silly subject about the cost of renovating the Fed’s headquarters. It looks like the President is using this to get rid of Powell before his retirement date in May, to get a replacement who’ll cut rates early to please Trump!
3. The President is threatening banks that he’ll put a 10% cap on credit card charges for one year. US bank stock prices headed south on the news. Overnight, JPMorgan reported better-than-expected on both top and bottom lines and its share price still fell!
4. Trump said Americans won’t cop higher utility costs because big tech companies use a lot of power and force up energy bills. Microsoft’s share price was down on the news.
5. Oil prices spiked on the news that Trump has cancelled all meetings with Iran and has told Iranian protestors, some who are being burnt in the streets, that “help is on the way!” This follows a Trump threat that any country doing trade with Iran will cop a 25% tariff on all business done with the US.
6. Finally, his eyes (green with envy over Denmark’s control of Greenland) have seen the Greenland PM declare in a message to Trump: “We choose Denmark!”

Of course, while we’re getting used to Trump’s unusual approach to leading not only his own country but also the Western world, all these curve balls (just as the Dow Jones and S&P 500 indexes hit all-time highs yesterday) set up stock markets for a sell-off.

On a good sign, US inflation looks OK, with the CPI for December coming in at 0.3%, taking the annual reading to 2.7%. Core inflation was 0.2% for the month and 2.7% for the year, which matched economist’s predictions.

Right now, markets aren’t coping with Donald’s big serves. Trump looks like he could be copping a few double faults. Crowd reaction on global markets might see the US President tone down his game, though I can’t envisage that he’ll ever play a considered calm contest like Jannick Sinner.

This guy in the White House is more like John McEnroe of old. Like Trump, McEnroe could play like a saint but at times sinned and carried on when he didn’t get his way.