Wall Street on green mood; 'Buy American' 'Hire American'

Wall Street closed on a green mood based on decent earnings and positive expectations from the Trump Era, which is full of promises to build back 'America.' Tax cuts and further massive spending are expected to keep active the US economy that seems in better shape than those on the other side of the Atlantic.Furthermore, important trade partners such as China, Mexico, and Canada are preparing to face a new administration willing to re-negotiate as hard as possible reducing their growth expectations. 

Understanding Trump's 100 days

Barbara Rockefeller, President at Rockefeller Treasury Services, notes that in trying to make up a list of good things that might come from the Trump presidency that becomes real at noon today, that's about it—three things. The rest of it is a trainwreck. Those yearning for lower debt or maybe even a balanced budget should despair.

She further writes, "Don't forget that enemies tend to test new presidents in the first few months with some outrageous insult or another. The presidential historians are out in force wondering who will be first to challenge Trump. Within a day of Obama taking office, there were challenges from three of the usual suspects— Russia, Iran and N. Korea. Russia said "Poland's agreement to allow U.S. weapons on its soil is an act of aggression we cannot overlook. We reserve to ourselves the right to take preemptive intervention should we deem it necessary." Iran demanded the US withdraw its military from the region or "face annihilation from Allah's righteous wrath." And North Korea warned that "unless U.S. payments to us are resumed we may be forced to undertake punitive measures."

"We can't expect authentic authority, namely Fed chief Yellen, to offset every tweet from the Trump twits. Yesterday Yellen said she doesn't see the economy picking up growth and certainly not overheating anytime soon, reinforcing the gradualism stance. At least the Atlanta Fed GDP Now estimate was 2.8% yesterday, the same as on Jan 13 when the chart looked like a dip was in the making," concludes the veteran analyst. 

VIX Options Signaling A Sell-Off 

Seeking Alpha notes that there is clearly a lot of uncertainty surrounding a Trump presidency. From the rhetoric surrounding deregulation to the proposed infrastructure improvement projects, no one is really certain about which, if any, Trump will follow through with. This uncertainty hasn't been clearly evident in the markets, with the S&P 500 rallying since the election. However, analyzing the options underlying the "fear index", VIX, it is apparent that investors and traders are preparing for the worst.

They further write, "One-month call options on the VIX, set to expire on February 15, has seen large demand in the past week. This implies that many see a market selloff following the inauguration of Trump. Much of the volume has been around the 21 and 22 strike, which have seen purchases of 250k and 100k respectively. The cost of each of those contracts was around $0.49." 

US President Trump - Policy will follow two simple rules: buy American and hire American

At the time of reporting, the Dow Jones Industrial Average added over 94-points and closed at 19,827.25 level, while the broader S&P 500 Index added around 7-points to 2,271.18. Meanwhile, tech-heavy Nasdaq Composite Index was trading up nearly 15-points to 5,555.33.

On the other hand, Gold pushed to the upside in a quick attempt to retake $1220. However, the metal fell short at $1214, or 7-points spike. The US dollar index, adjusted to the downside at 100.80 from 101.48 high after the same old 'America First' rhetoric offered over the last two months by the 45th President of the United States.

Meanwhile, in the currency markets, the American dollar lost ground against it counterparties in the last hours of the NA session in some instances losing up to 80-pips. 

How to trade President Donald Trump - Panel with Boris Schlossberg, Joseph Trevisani, and Harry Dent