Trader Warns - Treat The Trump Presser Like A Trending Market

Tyler Durden's picture

In a few short hours we’ll be treated to the President-Elect’s much-anticipated first press conference. We're not sure there’s been a more eagerly awaited event of its kind in memory. As Bloomberg's Richard Breslow notes, global markets (ex-Mexico and Turkey) have ground to a halt. You can cut the anticipation with a knife.

Will the powerful trends we’ve seen for the last two months continue? Or reverse with a vengeance? All will be revealed. And investors will know exactly which the best trades to set up their year are.

Don’t get your hopes up. But who knows? It’s a must-listen in any case.

Investors will do their best to focus on comments and policy prescriptions specifically aimed at various sectors of the S&P 500. There will be a natural tendency to try to ignore as unpricable potential policies that affect massively important geopolitical and international economic issues. That might work in trading the S&P financials index this afternoon. But perhaps not so well for the Asia dollar index, where the countries comprising that measure are already being forced to speculate on what the acronym might be for a China-led economic and security pact.

The markets began motoring on election night after Mr. Trump made what was considered a sober and constructive acceptance speech. It will go down in history as the best example of the bar being set low. I suspect the bar remains low. But it remains to be seen if these new price levels will require more than “don’t be outrageous” to sustain themselves and continue on.

There will be a lot of hearing what you want to hear. And a lot of self-serving analysis. Do we need fiscal stimulus? What kind will actually do some good? Can we afford a bigger deficit and more debt? What sort of deregulation helps, what hurts? Do markets care if the climate takes a hit? Or will it conclude, ‘The climate is just fine, thank you, and my portfolio loves it?’

Powerful trends tend to confound those looking for a market-reversal for longer than it seems possible. And if there’s one trend that’s defied all expectations for a reversal, it is this election phenomenon. It is probably well worth hearing the press conference first before speculating on its outcome.

Additionally, BMO strategist Ian Lyngen notes that:

  • Donald Trump focusing "primarily on fiscal stimulus and tax-cuts" at press conference scheduled for 11am will help equities, while Treasuries will likely "come under pressure."
  • On the other hand, more attention on Trump’s proposed "non- economic policy changes" may undermine bid for stocks, support Treasury market.

Earlier, Lyngen wrote in note to clients BMO was going into the press conference assuming a focus on issues, with Trump outlining plan for administration’s first 100-days.

If Trump were to speak "more aggressively" on tariffs and/or China as currency manipulator, the "inflation narrative" will take over in Treasuries.

A "30 minute diatribe" on importance of building a wall, nuclear rearmament would send "far different" (risk-off) message than outlining tax cuts, infrastructure spending (risk-on, status quo).

Throughout 1Q, Lyngen sees Treasury market looking to incoming administration to "justify" the economic optimism, inflation jitters that pushed 10-year yields from 1.716% to 2.639% following the election.

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small axe's picture

huh ?

the machines will do their duty no matter what

Truther's picture

CNN and MSNBC Fucktards will declare him insane and a fake. Fuck these bitches.

order66's picture

If China is a currency manipulator, what is Japan? Entire up move in S&P yesterday and subsequent failure back down was 100% correlation with Yen being hammered. And that's probably 1 of 1000 times that's happened.

Serfs Up's picture

Indeed.   And don't forget the ever reliable US paper """market""" gold slams.  

Because, such as.

Break_the_Bank's picture

And the dollar is not manipualted at all?  Right. It's not a problem if the US manipuates it's currency. 

BandGap's picture

I get a raging boner just thinking about how The Don is going to fix everything that is wrong with the universe.

Dick Butkus.

NugginFuts's picture

in other words, toss a knife in the air:

If it lands blade down, stocks will go up.

If it lands butt down, stocks will go up.

If it lands in your head, you should go buy some Bitcoin.

Uncertain T's picture

Considering the media.... You'd be best to watch this yourself... not listen to the spin from the Cartoon News Network CNN.

overmedicatedundersexed's picture

will the press ask about our #1 concerns??

1. incest?

2. golden showers?

3. are you a russian agent?

why must I listen to the pressitudes at all?? fuk em  TRUMP ..give your talk and tell the press until they become grown up >.GET OUT.

DontFollowMyAdviceImaDummy's picture

Hopefully he does not tip his hand any further to Obama, who can still jack things up majorly by ordering the military and spook elements to go all blowuppy these last nine-days.


Trump focus on the MAGA message and not all that fake news fertilizer that got exposed this past newscycle.

Seasmoke's picture

Hey look at that they hammered Gold and Silver in anticipation of Trump talking about something no one knows about what. Also strong for the USD and Stocks. Amazing!!!

Dave the jew's picture

Whilst he's building that Mexican wall He should stop fucking about and build a bridge to the uk ! install a lamppost every 100ft powered by dirty great pv panels :) ! ! ( au much ) That'll keep things going for abit :) .....

Red Wire's picture

Hi guys, check out my latest video update on the S&P00: