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0206nancy.mp3

Did 'The Trump Bump' Just Become 'The Trump Slump'?

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Trader George Ettinger, center, works on the floor of the New York Stock Exchange, Tuesday, Feb. 6, 2018.
Richard Drew/AP
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0206nancy.mp3

What goes up must come down, and on Monday what came down was the Standard & Poor 500-stock index — which faced its biggest percentage decline since August 2011.

The drop prompted The New Yorker's John Cassidy to write: "In the course of two days, the 'Trump Bump' in the stock market has turned into the 'Trump Slump.'"

Joining Boston Public Radio to make sense of the market's ups and downs was Harvard Business School historian Nancy Koehn. She said that characterizing the stock market's performance as a "Trump Bump" or "Trump Slump" doesn't reflect how the market actually works.

"The bottom line is that the president, pro or con, actually doesn't have a great impact on the market," Koehn said.

"Obama and, by the way ... George H. W. Bush, had more significant run-ups in percentage-terms in the S&P 500 than Trump has even had in 2017 and the first month of 2018," Koehn said. "They were both quiet about it, both those past presidents, on the grounds that, 'If you take credit for the rise, you take credit for the fall.'"

But because Trump has been so vocal in touting the stock market's gains during his presidency, Koehn said he might become associated with the market's dips as well.

"He's now going to, in some sense — optically and possibly politically — own some of the fall," Koehn said.

Click the audio player above to hear more from Nancy Koehn.

  • Amanda McGowan
    Amanda McGowan @amandaemcgowan

    Amanda McGowan is a producer for Boston Public Radio.


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