Gary Cohn Resigns
Summary
- President Trump's top economic adviser, Gary Cohn, plans to resign, adding to the list of White House departures.
- The S&P 500 plunged over 1% on the news of the Cohn resignation.
- Will this change the direction of the policy in the White House?
Gary Cohn Leaves
Gary Cohn, President Trump's top economic adviser, plans to resign, which caused the S&P 500 (SPY) to drop over 1%.
S&P Drop After Cohn:
Source: MarketWatch
Sources claim that Cohn is resigning due to losing the fight over trade tariffs. Cohn is not an advocate of trade tariffs and that seems to be the direction the President is set on taking.
The questions remain, however, who will become the new voice in President Trump's ear and what the result of the tariffs will be.
The economy is already starting to decelerate with most of the economic data in the January reporting period coming in below expectations. Today's factory orders showed a slight deceleration from last month's growth rate.
Core Factory Orders Year over Year:
Source: Census Bureau, EPB Macro Research
It seems the tariffs are a go. The market should now start to price in the impacts of these changes more seriously. Will these impacts be a boost to US GDP or a drag? It all depends on how the tariffs settle up after the retaliation attempts but typically the countries with a trade surplus have more to lose.
This latest White House departure could cause more market turbulence.
This article was written by
Eric Basmajian is an economic cycle analyst and the Founder of EPB Macro Research, an economics-based research firm focusing on inflection points in economic growth and the impact on asset prices.
Prior to EPB Macro Research, Eric worked on the buy-side of the financial sector as an analyst at Panorama Partners, a quantitative hedge fund specializing in equity derivatives.
Eric holds a Bachelor’s degree in economics from New York University.
EPB Macro Research offers premium economic cycle research on Seeking Alpha.
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