Will Trump’s spending bill luck run out?

It isn’t just a weekend of warmer weather for the President, who took off for Mar-a-Lago yesterday evening. It is possibly a weekend full of calmer news. The decision from Democratic minority leader Chuck Schumer to let the spending bill advance in the Senate allowed the six-month extension to get over the line last night, as the Senate voted 54-46 to see it through.

This seemed to give markets a temporary sense of relief as well, as growing expectation that the bill would pass saw stocks rally. Both the S&P 500 and Nasdaq had their best day gains since Donald Trump took office again, while technology stocks also appeared to make a major comeback by the time markets closed yesterday.

The backing of Schumer, combined with a perceived market comeback, will certainly allow Team Trump to keep pushing the narrative that it’s the President who calls every shot. Even if it takes a little time, the Democrats fall in line, the markets fall in line. Trump can test every theory of politics and markets — and eventually, those theories will bend to his will.

This may well stay true politically for a while longer. Markets are another matter. Yesterday’s uptick was not exactly a recovery, but rather a slowdown in the tumble experienced all week, as the stock market hovered around “correction” territory — when the loss is 10 percent or more compared to recent highs. Market experts are advising that Friday’s turnaround may have more to do with investors hovering up cheaper stocks than any serious bounceback in confidence.

As JP Morgan’s Chairman of Market and Investment strategy put it this week, markets can’t be “indicted, arrested or deported” for their actions — the first two the favored tactics of the Democratic party over the last few years when it came to their main political opponent. Nor can they be “intimidated, threatened or bullied” — somewhat frequent tactics of the President, who spent a large portion of the week bringing up, unprompted, what a great 51st state Canada would make. Rather, markets are a simple, apolitical reflection of whether investors think decision-making by world leaders is going to lead to better economies and growth opportunities — or not. The President goes into the weekend with indication that markets may have had a change of heart, but it’s far more likely they’re sensing a shift in political direction on tariffs and shutdowns, rather than really changing opinion about the impact of such policies.

It is certainly to Trump’s benefit that the shutdown was avoided, but it can be chalked up as a win for the Democrats, too. Even the President has been eager to praise Schumer for making what he believes to be the right call, by not shutting down the vote on a procedural point, suggesting in his speech at the Department of Justice yesterday that the Senate minority leader might just get some political credit for it.

The Democrats can’t get enough political credit right now, being so depleted of clout — even if it means it has to be dished out by Trump. It’s certainly not their preferred way of looking moderate to the public, but it was a rather savvy decision from Schumer not to shut down the government so early into Trump’s new term, not least because the smaller party often ends up looking petulant. 

Moreover, it would be a reach for the public to think that the Democratic party’s real concern was the state of the national debt. That supposedly sits with the Republican party right now. But for all of the valiant efforts so far of DoGE to cut wasteful spending, the deficit actually increased last month compared to the previous year, largely due to a fall in income to the IRS.

As has long been suspected, the President is going to have to start tackling a lot more than waste — so long as the most expensive areas of government (social security, Medicare) remain off the table, the public finances will remain on an unsustainable track. 

It might not be the President’s worry this weekend, but it will catch up with his administration soon.