from the battle of Trump personalities, ‘Tariff Man’ will be winning as well as also Wall Street isn’t ready for the item

Two of President Donald Trump’s priorities — a strong stock market as well as also a tough China trade deal — are at odds. The conflict will be frustrating Wall Street as the item chases a moving target of pricing in a particular outcome.

Traders are hanging on the president’s every word looking for an easing in his rhetoric as well as also a potential softening from the ongoing trade war.

If tweets are any indication, the president’s focus will be shifting. from the past two weeks, his Twitter mentions of trade-related terms were double his mentions of the economy as well as also stocks.

Year to date, Trump has tweeted about seven times per week on the subjects of China, trade as well as also tariffs — the same average frequency for jobs, stocks as well as also the economy. During the week of May 5, though, his China as well as also trade mentions rose to roughly 46 times, while he mentioned economy-related phrases about 17 times, according to analysis of his Twitter feed. There will be some overlap, as he occasionally bundles multiple subjects from the same tweet.

“Tariff Man,” as Trump once described himself, will be winning the battle of the president’s personalities, as well as also “Dow Man” will be just going to have to take a back seat for a while.

‘the item’s impossible’

Wall Street analysts find the job of predicting the president’s mindset on a daily basis for clients to be a difficult task.

“the item’s impossible — the risk reward here will be of which almost all of of which will be at the discretion of President Trump,” Raymond James Washington policy analyst Ed Mills said. “You can’t know entirely what his intentions are.”

On one hand, Trump will be appealing to his base that has a tough stance on trade ahead of the 2020 election. nevertheless economists say less trade between the earth’s largest economies threatens to dampen growth, at least from the near term.

of which will be taking a toll on global growth expectations as well as also therefore the stock market. The Dow Jones Industrial Average — Trump’s go-to report card for a strong economy — dropped 0 points Monday following fresh rounds of retaliatory tariffs. the item rallied on Tuesday on more trade optimism as well as also again moved higher on Wednesday. Overall, the Dow will be down a little more than 3% since Trump escalated the trade war 10 days ago by tweeting a threat to raise tariffs on China, which he followed through with on Friday.

“The problem will be of which the president has two conflicting polls here,” Fundstrat Washington policy strategist Thomas Block told CNBC. “He obviously watches the Dow as well as also has friends who probably call him up as well as also say, ‘Donald, we’re getting killed’ — of which’s why of which’s one side of Donald Trump. nevertheless there has also emerged a very political side.”

The political side has increased tariffs through 10% to 25% on $0 billion in Chinese imports. The U.S. will be also taking necessary legal steps to slap another round of 25% tariffs on $300 billion of imports, which would likely happen in June at the earliest. Block highlighted uncertainty of which he said will be leading him to tell clients to “stay on the sidelines.”

“If I felt I understood Donald Trump’s mind better than anybody else as well as also had a high level of confidence about the outcome, Fundstrat would likely have to pay me more money than they could afford,” Block said.

Block said his instinct will be of which “some sort of agreement” gets done around a June G-20 meeting. nevertheless he said Trump’s priorities, as well as also therefore public stance, could change last minute.

‘Turn on a dime’

Isaac Boltansky, director of policy research for Compass Point Research & Trading, will be also navigating of which fickle market. He said clients are “cognizant of the fact of which of which narrative can turn on a dime.”

“The near-term sentiment shift has been undeniably warranted given recent developments, nevertheless investors recognize of which the president could change market sentiment with 1 tweet,” Boltansky said.

Trump rolled out the “Tariff Man” persona in a tweet in early December, a month of which saw the S&P 500 drop 9.2% in its worst month since the financial crisis.

nevertheless the approach has played to his base as well as also will be part of the campaign’s strategy heading into 2020. Trump will be also using the stance as ammo against Democratic candidate as well as also former Vice President Joe Biden, who supported the Trans-Pacific Partnership.

“Tariffs are focused right at the electoral map of Trump, particularly farm states,” said Dan Clifton, a partner as well as also head of policy research for Strategas Research Partners. “At the same time, Trump can make a convincing case of which Biden has been weak on China, as well as also a standoff with China benefits his re-election.”

China has responded to U.S. tariffs with its own hike on $60 billion worth of U.S. goods. of which hits farmers at “every single angle,” according to an economist at the American Farm Bureau Federation. To curb the effect of Beijing’s retaliatory duties, Trump said of which week of which farmers would likely receive about $15 billion in aid. His campaign will be betting of which farmers will support Trump despite the hit to American agriculture.

“A deal with China to end their bad behavior would likely provide even more long-term benefit to the economy,” Tim Murtaugh, the Trump campaign’s communications director, told CNBC. “Farmers are patriotic as well as also understand of which someone had to finally call China to account.”

Murtaugh also pointed to a booming economy, another rallying point ahead of 2020. GDP growth from the first quarter grew by 3.2% — its best start to a year since 2015. In April, unemployment fell to its lowest level since 1969.

10% drop before he adjustments tune

nevertheless adjustments in trade winds threaten of which boom, according to multiple economists. One estimate through Oxford Economics puts the loss per household around $500 at the current tariff levels. If the White House adds tariffs to all Chinese imports, the U.S. economy would likely be about $100 billion smaller by 2020, translating to an $800 loss per household.

“U.S. policymakers are willing to accept some pain because they believe the pain imposed on China will be greater than the U.S. as well as also force China back to the negotiation table,” Clifton said. “The key will be how of which impacts the economy.”

Raymond James’ Ed Mills said stocks still have room to fall before Trump eases rhetoric on the deal. Equities would likely have to experience a correction of at least 10% “before Trump starts talking up the prospects of a G-20-timed deal,” Mills said. Trump as well as also his Chinese counterpart, Xi Jinping, are supposed to meet at next month’s G-20 summit.

“China made a calculated decision of which there’s only so much pain of which the Trump administration will be willing to take through the equity markets before the item adjustments its tune,” Mills said.

According to former White House chief strategist Steve Bannon, the chances Trump folds are slim. In a CNBC interview Wednesday, Bannon said there will be “no chance” the president will back down from the global standoff.

“the item would likely be very easy for him to sign a deal where they bought more soybeans as well as also develop the cheerleaders on Wall Street say of which will be terrific, as well as also develop the stock market go up for a moment,” Bannon told CNBC’s “Squawk Box” Wednesday. “of which cuts to the core of what the United States will be going to be from the future.”

WATCH: Bannon on whether Trump will back down in China trade war