How to Trade President Trump
It’s been another mixed open for European stock indices this morning although overall there’s a slightly softer tone. It’s all been something of an anti-climax after yesterday’s anticipated House vote on repealing and replacing Obamacare was delayed. It’s unclear what may happen next although the president is pushing for the vote to take place today. Mr Trump has also said that without a vote he’ll move on to other issues and leave the controversial Affordable Care Act in place.
The market is trying to figure out if the House vote on the bill to replace Obamacare will pass or fail. The bill itself isn't so much what's at stake. The market is increasingly viewing it as a test of Republican leadership. It's a barometer on whether Paul Ryan and Donald Trump can whip the House into supporting its agenda.
|Key Trump Promise||Effect on Stocks||Effect on USD||Effect on Gold|
|Increased fiscal spending/stimulus - Particularly on infrastructure and defense||Bullish - Increased economic growth and industrial production help boost equity markets||Bullish - Increased spending leads to higher inflation and interest rates, pushing up USD||Bearish - Higher growth, interest rates, US Dollar and stocks should weigh on Gold|
|Lower corporate taxes - Down to 15% from 35%||Bullish - Lower taxes increase after-tax cash flow and earnings, and bring income back to ||Bullish - Economic growth through lower taxes and fiscal stimulus boost interest rates / USD||Bearish - Higher growth, interest rates, US Dollar and stocks should weigh on Gold|
|Financial deregulation - Repeal heavy regulations on Wall Street and corporate America||Bullish - Fewer regulatory hurdles increase financial and banking activity, fostering business growth||Bullish - Increased financial activity leading to economic expansion should lift interest rates and USD||Bearish - Higher growth, interest rates, US Dollar and stocks should weigh on Gold|
|Increased job creation - Retain and create jobs in the US||Bullish - More jobs lead to higher spending, demand and increased business growth||Bullish - Better employment rate leads to hawkish Fed and higher interest rates / USD||Bearish - Higher growth, interest rates, US Dollar and stocks should weigh on Gold|
|Protectionist trade policies - Tariffs and restrictions on Mexican, Chinese ||Bearish - Restrictions on trade can create trade wars and backlash on US companies doing business abroad||Bullish against targeted EM currencies, Bearish overall if trade wars result||Bullish if trade wars result, which could boost gold as a safe-haven currency alternative|
What is the Trump trade? How long it will last and what are the major things that the trader should focus?
After the elections in Europe this year, it will become increasingly clear that the Brexit is good for both parts, the United Kingdom and the European Union. Sterling will be a good bet for the second half of 2017.
US stocks going to rally another 10% before summer and then we will see risk off. It is time to make a big switch to bonds.
Notwithstanding the strong demand for gold and silver globally, buying activity in the U.S. retail market for physical bullion has fallen noticeably in the wake of Donald Trump’s election victory. And retail selling in the U.S. has increased. The bullion markets have entered a new phase. The two terms of President Obama included the aftermath of the 2008 financial crisis, zero interest rate policy from the Federal Reserve, and...
The Trump Rally is an extension of a broad market advancement that began roughly a year ago after a somewhat sever correction early last year (2016), that brought down major U.S. market averages approximately 15% on average. However, markets have been charging higher ever since. Most noticeably, gains have increased significantly since this latest stage of the boom higher that began 1 year ago. Since then, the S&P 500 is up 33%...
We think Trump will pursue a policy of weaker US dollar. Whether this will turn into direct policy, i.e.: announcing the end of US reserve status similar to Trump’s political hero Nixon taking the US off the gold standard in 1971, could be more clear by end of March. We see US dollar index testing the 96.00 level on unchanged policy. If confirmed that weaker dollar is the new policy of...
For some reason, currencies are a particularly difficult concept for Americans to wrap their heads around. Just ask the new US President, who reportedly called his national security advisor at 3am one day in February to ask if a strong US dollar was good or bad for the US economy. Not surprisingly, the national security expert allegedly demurred, suggesting that...
USD/MXN: The Trump Trade
Currently, USD/MXN is trading at 20.04, down -0.26% or (526)-pips on the day, having posted a daily high at 20.16 and low at 19.96. The American dollar vs. Mexican peso seems to somewhat 'hold horses' as the greenback recovered 2.58% during the last 3-consecutive trading sessions.
USD/MXN Best Spreads
Donald Trump, a billionaire real estate mogul billed as the ultimate outsider, aims to shake up the US political establishment, which could potentially cause extensive market volatility along the way. Going forward, Trump should have a substantial impact on various key financial markets such as US Dollar, Euro, Yen, Pound and other important currencies as well as stocks,
Trump was the second major-party presidential nominee in American history whose experience comes principally from running a business (Wendell Willkie was the first). By getting elected, Trump became the first United States President without prior government or military experience, and the first without prior political experience since Dwight D. Eisenhower.