Is the State of the Union the best economy ever?
Stock market concerns ahead of Trumps State of the Union
The president will give his State of the Union address on Tuesday. Certainly one of the topics will be about the stock market, which is critical to tens of millions of retirement plans. KTVUs Tom Vacar on why the market is so concerned.
SAN RAFAEL, Calif. - With the president about to deliver the State of the Union on Tuesday, very unhappy stock markets, critical to tens of millions of retirement plans, will be listening closely. So, why are those markets so worried?
In the long run, the U.S. economy has reliably been like riding a Pogo stick on an up escalator punctuated by occasional national financial disasters. Nonetheless, on Monday, President Donald Trump reiterated that the U.S. economy is the best ever.
Best economy?
What they're saying:
We asked a woman coming out of a US Post Office if she bought into that concept. "No, because it's stupid. Anybody going to a store or anyone trying to do anything with money knows that's not true," said San Rafael resident Ronettt King.
The stock market didn't buy it either, with newly imposed 15% tariffs causing more uncertainty. "Tariffs are becoming harder to plan for a business than it is to plan for an airline in the middle of a snow storm," said Terry Connelly, Dean Emeritus of the Golden Gate University School of Business.
The new 15% tariffs are maxed out and expire after five months unless Congress approves a longer period. "It's piling more uncertainty on at a time when the markets' biggest need in a tariff area is clarity," said Connelly.
"I'm a family therapist and I would say that peoples' nervous systems go haywire when the market goes haywire and there's been a lot in the news," said San Rafael resident Maryellen Mullin-Fong.
Ocean shipping companies that deliver cargo worldwide ar uncertain. "We're not really sure what 2026 is gonna look like, but smart money is more of the same, more of the roller coaster," said Pacific Maritime Shipping Association CEO Mike Jacob.
Seeking business elsewhere
The roller coaster is sending many trade partners to do business elsewhere. "Ships go where the cargo flows," said Jacob.
Many of our trading partners are trading less with us and more with other nations. "Trade patterns are changing because of not just the US tariffs but the world's reaction to tariffs from the United States," said Jacob.
The A.I. angle
The stock markets are also deeply worried about the stability of artificial intelligence firms of how soon AI might wipe out millions and millions of jobs. AI requires massive new computing data centers as well as new electricity plants to power them.
"We are nowhere near that capacity even though they are talking about making those investments," said Santa Clara University Business School Professor Kirthi Kalyanam.
The professor also says AI computing is very, very expensive. "It may take a $100,000 AI budget to replace an $80,000 human being," he said.
Finally, AI will not know all because many owners will deny AI access to their highly protected information.
What's next:
Back to our consumers. "Pay attention to what's going on, but, what I think I would say is go out and vote," said Ms. Mullin-Fong.
"When you have leadership that is so fluid and inconsistent that it causes instability, it causes emotional instability. It causes fiscal financial instability," said King.
The president speaks at 6 p.m. Tuesday.
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