Trump set to change market dynamics

globalintelhub's picture

Remember Fed Watchers?  It was like a market fetish - watching Sir Alan Greenspan's every move, as a possible 'hint' of interest rate policy.  Was his briefcase heavy?  Did his shoulder sag more than usual - indicating many papers in the briefcase, which means the Fed has a lot to decide?  Those were the days.. although Ben didn't seem to have the intellectual charisma of Sir Alan, Ben Bernanke seemed to work as a robot, with no indications from his personality whatsoever, not even a twitch of his beard.  No comment about the current Fed Chair.

Trump however, seems to have changed the game - look just from today:

http://www.zerohedge.com/news/2017-01-31/biotech-stocks-slide-trump-slams-astronomical-prices-tells-drug-ceos-get-prices-down

If anyone was wondering what Trump would tell Pharma CEOs in an ad hoc meeting scheduled for 9 am today, here is the answer:

  • TRUMP TO DRUG CEOS: YOU HAVE TO GET PRICES DOWN
  • TRUMP ON MEDICARE, MEDICAID WE NEED PRICES WAY DOWN.  PRICING HAS BEEN ASTRONOMICAL
  • TRUMP SAYS NEED TO MAKE DRUG PRODUCTS IN THE US
  • TRUMP WILL OPPOSE REGS FOR SMALLER COMPANIES

Some companies are even developing strategies to monitor "The Trump Call" tweet effect:

Just in time for his inauguration, London-based fintech firm Trading.co.uk is launching an app that will generate trading alerts for shares based on comments made on social media by Donald Trump.

Keeping one eye on the U.S. President-elect’s personal Twitter feed has become a regular pastime for the fund managers and traders who invest billions of dollars daily on world stock, currency and commodity markets.

This is all well and good but what implications for the broader markets?  Such a market force has frankly, never existed.  When someone like Bill Ackman tweets, people notice.  But it won't drop the USD Index by 1%, nor will it tank the Biotech Index, or tech.  For better or worse, the Trump tweet effect is a new force that's changing the market dynamic - let's say for the better, because at least it's disruptive.  Fundamentally, short term spikes shouldn't change anything, it's just perception and knee jerk reaction.  Algos should be adaptable, and if you're trading for the long term fundamental play - short term moves shouldn't matter too.  

But this is a 'visible hand' that's never been seen in the markets before.  It's a new risk, a new risk to hedge.  It's possible to hedge any risk, using options, futures, insurance, and other instruments.  

On the other hand, entire strategies could be developed, just trading the Trump tweet momentum - but you'll have to be quick!  

To learn about FX Hedging, such as Emerging Market hedging which is going to be an increasing issue in 2017 - Checkout Fortress Capital Hedging.

If you want to get started learning how markets really work, checkout some titles from the bookstore here at pleaseorderit.com

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
messystateofaffairs's picture

Trump knows pharma is a giant scam and there is tons of room to cut costs. For example a simple gauze pad used in a hospital could be renamed a jewish blood sucking device on the invoice with a $100 charge. The scam goes from pharma to health care to insurance.

Pitchman's picture

The President recently put up a portrait of Andrew Jackson in the Oval office.  The lame stream media interpreted it as some twisted glorification of the "Trail of Tears" and completely ignored Jackson's triumph in taking down the Second Bank of The US.

Look to Janet Yellen to raise rates decisively and disrupt the hope of recovery.

***

If the first phase of a countries overthrow is agitation and disruption, how well is it going for the Soros allied deep state?

This is about Psychopathic behavior; the behavior of a few, so far outside social norms it threatens to destroy the most powerful empire the world has ever known.

This story is about an investigation by George Webb that takes us back to the Dulles Brothers and the birth of the CIA in 1947.  It includes a cast of characters, entities, and events leading up to Snowden; including Booze Allen; the Carlie Group; the Enron scandal; Kosovo; Somalia; Argentina; the Clinton Foundation in Haiti; Hillary's arming of ISIS, and destruction of Libya.  And then there's the FALSE FLAG attack on Syria, using Sarin Gas from Libya, for which Assad was blamed.

Webb began investigating the Clinton Foundation and has descended into a labyrinth of a Rabbit hole. Be assured the prima facie evidence against Hillary in Haiti, Libya and the Foundation, including Bill, is overwhelming.

"DynCorp, Haiti & Me: Will Trump Drain the Swamp? This is How We'll Know  

https://notionalvalue.blogspot.com/2017/01/dyncorp-haiti-me-will-trump-drain-swamp.html

 

Donald J. Trump's picture

I missed that about the Jckson painting in the oval office.  Good to know.  Probably means Trump won't let the $20 be replaced with the Tubbies.  I hope he protects Jackson square in NOLA too,  seems to be some calling to tear down the Jackson statue.

bardot63's picture

Harriet Tubman was a 19th century domestic terrorist.  She helped plan and finance the deaths of two US Marines and six townspeople during John Brown's raid on Harper's Ferry.

https://www.moneymetals.com/news/2016/08/03/andrew-jackson-bank-war-000905

Citizen_x's picture

 

trump the hedge fund...

AliSONY's picture
AliSONY (not verified) Jan 31, 2017 12:42 PM
Only one analyst has a proven track record in stocks, oil and gold. Been nailing this action. And  proves market calls by showing past time stamped charts. https://www.facebook.com/166578775325/photos/a.10153488951800326.1073741...
LowerSlowerDelaware_LSD's picture
LowerSlowerDelaware_LSD (not verified) AliSONY Jan 31, 2017 2:30 PM

It is SO sad that this failed trader  - ScamWave - has to resort to a ZH comments section spam, trying to earn enough to move out of his Mom's basement.  Time stamped PROOF!...

Please don't give him the satisfaction of seeing his site hit counter go up from ZH clicks. He's not very bright, but eventually he’ll go away if his spam scam doesn't bring income from ZH. 

The spammer has registered the following spam accounts on ZH to promote their scam.  Watch how he uses his multiple spam accounts to give himself thumbs ups and "talk" to himself, pretending to be multiple people praising ScamWave. - 4Xleverage, AliSONY, Babs.St.Louis, Billy G, Chi Juan, Dr.Carl, ErikE, FemDayTrader, FRLEPU, Irvingm, jasony, John Beau, KanSass, KC Spike, lostinhedge, MadhyaBharatx, Marilee, MexInvest, MikeM54, Miss Lou, Mon T, P Christmas Carole, Penny Trader, Pinky and the Brain, PUNE,  RoBERTAZ, RonnieM, RudolPHDs, Sonya B59, Stan Your Man, StevieTexie, Timming, Van G, Virginia Wooolf, wisetrader224, and xantippa

TradeByNight's picture

Would anyone like a 5% discount on bullion?

 

Use this code: REDDIT2017

 

https://www.invest-in-bullion.com

 

"An investment in knowledge pays the best interest." - Benjamin Franklin

fbazzrea's picture

Mr. T's figured out he can play the "talk game" better than Yell'n. he and his team are going to talk the dollar down to ease the pain as he crashes the markets to get it over with.

smooooth...

seanindundee's picture

The media has found the solution to the tweets: It's called fact checking and the truth.

marathonman's picture

Righhtt, the MSM is now going to shower us with fact chekcing and truth.  Good one Sean!   A real knee slapper!  ROFLMAO