Posts Tagged ‘ Trump Rally ’

Holding Pattern

March 31, 2017
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Holding Pattern

The relentless grind higher in equity markets continues irrespective of periods of policy awkwardness, twitter rants, and republican in-fighting. Recent announcements that corporate tax reform isn’t likely until August/September didn’t faze the market at all. Clearly, the benefit of the doubt is being given to the Trump administration to make the American economy greater, and, the Fed is complicit, hinting at a lower for longer interest rate policy, still, into 2017. Not surprisingly, asset price re-ratings persist, and now the bond market, gold, energy, commodities, EM currencies, have all bounced too. Risk pricing remains high, and implicit volatility is exceptionally low. The playbook, between now and the fall, appears limited at first blush, with markets neither likely to rally at an accelerated pace, nor likely to sell off meaningfully,...

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2017

February 1, 2017
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2017

2016 started in a tailspin with spiraling China meltdown fears. Those fears proved to be ill-timed, and against most prognostications, despite BREXIT, the start of Fed rate hikes, and the looniest election anyone can remember with a shocker outcome, the market went on to have a gangbuster 2016, producing a total return of 12%. The Trump rally surprised most, and despite highly unpredictable tweeting habits, and inflammatory comments, the markets took to the perception of the return of a business friendly administration. 2017 started with complacency, and the Trump driven market getting “the benefit of the doubt”. Interest rates are modestly higher, though this isn’t thought to be problematic because stimulus is proposed to support US GDP growth. Jobs are being talked/threatened back into the US. The financials exploded...

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Turkey Day Highs

November 29, 2016
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Turkey Day Highs

The bull market is set to turn 9 in 2017. Vanquished by the bull: Eurozone crisis, deflation, China bubbles, taper tantrums, BREXIT, and now Trump. The bullishness of the tape continues to shock, with the Trump rally, after the fact, looking strikingly similar to the BREXIT rally; the market provides every indication that one outcome is good, the other outcome bad, it gets the bad outcome, and not only fails to sell off, but rallies on it! Enough to generate plenty of Aflac goose head shakes. Why did the market change its mind on Trump? Firstly, a Trump victory was never really “bad” it was just unfathomable, and Trump’s campaign rhetoric was at times, preposterously market unfriendly (forcing production in the US, undoing global trade). Upon further consideration, the...

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