Instead of being happy for America on our historic day, The Norwegian “America Experts” (Nettavisen in Norwegian) blasted him as fierce and divisive. VG, the leading Norwegian paper referred to the speech as dark. Nowhere, in their analysis, was a counter-thesis, offering the underlying reasons for Trump’s statements. No acknowledgment of our decline over the past generation, despite the technological gain and offshoring.
The key economic releases this week are durable goods and GDP on Friday. On the political front, the focus will be is on the first actions of the Trump administration including moves on TPP and NAFTA. There are no scheduled Fed speeches this week.
President Trump’s economic plan will create 25 million new jobs in next decade, “return to 4 percent annual economic growth,” "lower rates for Americans in every tax bracket, simplify the tax code, and reduce the U.S. corporate tax rate” according to a statement posted on the White House wesbite.
"The deep state" is shorthand for a force within Washington that is able to guide the US' ship of state over periods of time longer than presidential terms, and at times despite the stated intentions of elected officials. If Trump has indeed embroiled himself in a conflict with this entity, then, what does that mean for his policy plans and for the post-Inauguration markets?
Commence 'pain trade.' Expect there to be significant buy-side performance pain today with regards to the below key “long USD”-linked “US reflation” trades (as quoted above) seeing real capitulatory / unwind flows.
Potential Winners: Companies with a majority of their input costs contained within the U.S; Potentially lower tax rate of 20% on sales and full deduction for input costs; U.S. Exporters: as export revenues are not subject to U.S. tax. Potential Losers:Products, services, and intangibles imported into the U.S.; Automakers, Oil and Gas, to Retailers can be impacted; U.S. Multinationals that have relied on aggressive tax planning to shift earning overseas.
"The news conference was a far cry from the market friendly, pro-growth "presidential" comments that Trump delivered at his acceptance speech," wrote analysts at Westpac, adding it left a "veritable laundry list" of questions unanswered.
The US Dollar is the “grand unifying theory asset” for nearly any and all “profile” global macro or thematic equities trades in the marketplace right now, as it represents investors being long this “new” version of “economic growth.” As such, performance is significantly tied to the direction in the US Dollar.
European and Asian shares, the dollar and crude all rose before President-elect Donald Trump’s first press conference since July at 11am on Wednesday, while S&P futures are little changed. Surging raw-materials stocks sent Asian stocks higher. Oil rebounds from the lowest level in a month.
Beware the commodity "black swans" in 2017, at least according to Barclays. The British bank warns that raw materials markets from oil to metals face the a high likelihood of disruptions, which among, other include a default by Venezuela, riots in Chile, a trade war with China, more terrorism in Turkey, and even a Fukushima-type disaster in China.