Wall Street Scrambles To Change The Trump Narrative Again

Tyler Durden's picture

Until yesterday, the prevailing Wall Street consensus was that in the absence of specifics from President Trump on his economic and fiscal plans, the market would be disappointed, and proceed to slide. It did not, in fact quite the opposite.

As a result, the world's best paid strategists have again - just like after the election - revised the "Trump narrative" after the fact, and now the prevailing analyst sentiment is that markets will like Trump’s address to Congress as he cooled his rhetoric and likely gained political capital. As Bloomberg adds, the reflation trade, which has been boosting financials, held, even as the speech was short on details, forcing the U-turn in the plotline. Still, while turning tactically bullish overnight, there is an agreement that efforts on tax reform and infrastructure spending are likely a long, uphill slog, as those priorities may get squeezed by other agenda items, like health care.

Here is a recap of some of the most prominent notes flying around this morning, virtually none of which to Mark Cudmore chagrin, suggest - if only for now - that the "emperor is naked."

KBW (Brian Gardner)

  • Markets likely to react positively to Trump’s less confrontational, more optimistic tone; may like cooler rhetoric on trade; speech may play well among voters outside of Trump’s base, buying him some political capital
  • Possible to read speech as implicit endorsement of border adjustment tax (BAT), though will be "uphill fight" to include BAT in tax reform even with Trump’s support
  • No direct impact on financials as didn’t mention Dodd-Frank or changes to financial regulations; seemed warmer to legal immigration, which may be good for sectors that rely on immigrant labor, like homebuilders; infrastructure spending may get "squeezed out" by competing agenda items like health care, tax reform

COMPASS POINT (Isaac Boltansky)

  • Speech was positive market signal, though presidential honeymoon is "very nearly over," must be legislative progress in next 60 days to "sustain and swell" market optimism
  • Watch for health care progress by March 15; tax reform language by April 10 recess; deal avoiding April 28 govt shutdown
  • Top takeaways:
    • Trump comments "intellectually supportive" of BAT; Compass Point sees BAT as "central pillar" of tax reform effort, with far more staying power than market reflects
    • "Notable" Trump highlighted Harley-Davidson given its deep roots in Speaker Paul Ryan’s home state of Wisconsin
    • Trump’s call for $1t infrastructure spending probably won’t translate into legislative language in 2017 amid political, procedural hurdles
    • Implied support for health care tax credits is "mile marker" as House GOP hardliners worried about swapping ACA subsidies for new tax credits; turns down the heat on ideological schism
    • Didn’t address Dodd-Frank or mortgage finance reform

COWEN (Jaret Seiberg)

  • Speech serves as a reminder to bank, housing investors that White House will devote political capital in 2017 to "other fights"
  • Means regulators will need to help banks and housing; watch personnel choices over next 16 months to assess how much regulatory relief Trump team may deliver
  • No surprise Fannie, Freddie didn’t make speech as GSE reform isn’t top priority; Congress will likely drive housing finance reform; Treasury Secretary Steven Mnuchin probably won’t put Trump priorities at risk by pushing unilateral action on FNMA, FMCC; may focus on advancing infrastructure spending, limiting banking/housing efforts
  • Separately, Cowen’s Chris Krueger writes Trump offered more optimism, less detail in "sequel" to "American Carnage" inaugural; likely to receive a polling boost to ~50%+ approval; "trench-warfare" on Capitol Hill remains stalemate as clock ticks, everyone waits for "the next tweet"

FBR (Edward Mills)

  • Speech gave "strong but subtle" signals in favor of policies that divide Republicans, like BAT, infrastructure stimulus, while largely mirroring predecessors’ State of The Union addresses
  • Democrats "body language" showed it will be tough for Trump to get anything done that requires 60 votes in Senate
  • Comments on health care (including period of stability for those on ACA, tax credits for insurance) "largely positive"  for pharmaceutical industry, although Trump mentioned drug prices
    Trump Says He Wants to Speed Up FDA Approval of Medicines; Calls for ‘Stable’ Obamacare Transition, Lower Drug Prices

CREDITSIGHTS (Peter Petas)

  • "America First, details second" speech showed reflation trade is intact, with focus on tax reform, deregulation, infrastructure spending, call for Congress to act quickly
  • Lack of specifics backs those questioning execution timing, potential for protracted legislative conflicts; notes continued protectionist trade rhetoric, economic nationalism that’s periodically shaken the markets; most worrying aspect from market’s perspective may be seeming endorsement of BAT
  • Other risks: Negative growth impacts of immigration, trade, tax choices; European elections; Chinese economy; also wary of equity "correction," trend to larger, more transformative M&A deals

EVERCORE ISI (Terry Haines)

  • Speech unfolded "as advertised"; policy details due in coming weeks
  • Broad-themed remarks were aimed at political/voter audience, not markets; designed to make case to Congress, public for top priorities of jump-starting the economy, fixing ACA, improving national security
  • Investors who were looking for a clear statement of Trump priorities and resolve got what they sought; investors who wanted policy detail may be disappointed

BMO (Ian Lyngen)

  • Lack of details about tax plans, legislative priorities means address didn’t provide much support to risk or much pressure on Treasuries
  • Notes 10Y yields were within 2bps-3bps range during speech; passage means one less headline risk for Treasuries in Fed-heavy week

RBC (Michael Yee)

  • Trump’s commentary around drug pricing "unspecific and vague;" rhetoric around drug pricing "less noisy" compared to last year
  • Investors aren’t "buying" Medicare price negotiations as realistic outcome; generalist investors may return to biotech through 2017
  • Presence of Amicus Therapeutics CEO, daughter and Trump comments around need to "slash restraints" at FDA and elsewhere may help FOLD, and bode well for agency decision on BioMarin’s experimental therapy for Batten’s disease

MORGAN STANLEY (Brian Essex)

  • Address left BAT option on the table, which may be a risk for IT services sector
  • See earlier story: IBM, CSC Best Positioned in IT on Trump Speech

Source: Bloomberg

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bigdumbnugly's picture

Dumbass, bullshit, fake, propagandized articles are in vogue now.

bigdumbnugly's picture

Tomorrow new dumbass, bullshit, fake, propagandized articles hit the presses

Erek's picture

Wall Street Barker: Hurry! Hurry! Step right up!

Lay your money down!

Throw the dice!

Spin the wheel!

 

Aaaannnnddd! ................ It's gone!

 

C'mon kid. Try again!

Ghost of PartysOver's picture

Only the foolish value what a Wall Street Carnival Barker says.  Emotional decision making leads to disaster while logical decision making leads to success.

DownWithYogaPants's picture

You could win a kewpie doll.

It's so funny.  Trump has these square / self important / retards sucking their own fucking dicks and commenting how it's the best blowjob they have ever had!  It's hilarious.  You have to love Trump for this if not for anything else.  They so deserve to be put center stage performing autofellatio on their Craftmatic Adjustable Beds.   This particularly applies to:

  • John McCain
  • Lindsey Graham
  • Mitch McConnell 
  • Paul Ryan
  • Nancy Poloci 
  • All the news networks 
  • etc etc etc

He said with a grin as he wiped cum from his chin if my ear was a cunt I would fuckit

Anybody want to pitch in with me and get McCain a "I am the man from Nantucket" tee shirt?

hip hop rap's picture
hip hop rap (not verified) DownWithYogaPants Mar 1, 2017 11:34 AM

I'm making over $7k a month working part time. I kept hearing other people tell me how much money they can make online so I decided to look into it. Well, it was all true and has totally changed my life. This is what I do... http://bit.ly/2jdTzrM

MFL5591's picture

Big money moving out, small investors will be left holding the bag.  Nothing new here!

Pasadena Phil's picture

Trump apparently went too far again by promising to cut taxes and slash regulations. Even Hitler didn't go that far. Trump is WORSE than Hitler!

The establishment "experts" ought to drop the Hitler phrase and substitute "in you pants" for it. Just as dumb but it would a least be good for a few laughs anyway.

werker's picture

So are traitors.  SEE TRUMP FOR DESCRIPTION

moonshadow's picture

U spelled your name wrong. It's spelled w-a-n-k-e-r

nmewn's picture

See Trump for description...did he say something about the Clinton's, Pedesta, Pelosi, Schumer or Soros again?

I must have missed it  ;-)

NugginFuts's picture

I think the real narrative here is these analysts were thinking the speech would be much much worse than it was. The fact that he managed to get out of there without any major "oopsy" moments means he beat expectations. Now everything is awesome again!

Quick - let's go buy all the things!

DownWithYogaPants's picture

It's not about any oopsy factor.

It's about they think he "might play ball" with the cronies.

I would look for a big delicious head fake on this one!  And it will be delicious.  Seriously the USA really in many ways collectively does not even deserve this guy.  I thank my honest midwestern folk for putting this guy over the top.  Only they have the fiber  and the heart for this sort of gambit.  I grew up in the midwest and have since lived many places.  The rest of the world would do good to try to imitate many of their better qualities.

Hammer823's picture

Wallstreet will change the narrative forever to justify the perpetual rally that is required for our economy to work.

An ever increasing stock market it not OPTIONAL.  It is required.  That's why the stock market is rigged to go up.

https://www.instagram.com/the_rigged_street_journal/?hl=en

zagzigga's picture

Yup. They will keep changing the narrative as needed but the rally will go on. BTD and chase breakouts - that's the only game in town.

werker's picture

Alright. fine. live then

flaminratzazz's picture

Make no mistake. big biz and bankers run this place.

flaminratzazz's picture

always will

same as it ever was

flaminratzazz's picture

Would not change the above fact, war or no war, the moneyed interests will just get richer and usurp more control.

crossroaddemon's picture

A lot of people don't understand how much a post-revolutionary govenment would have to sell out. You have a nation full of people who aren't sure they trust you yet (many of them were not supporters) and you've got major probems with disrupted supply chains, utility outages, and a population that no konger can survive if the shelves go empty. If you're to successfully govern you need to get the power on and the trucks running on time fucking yesterday, and you're going to need money. A lot of it. This is when the Rothchilds put their hand on your shoulder, and you really have no alternative.

We're too far down the rabbit hole. There's no non-catastrphic way out of this.

LetThemEatRand's picture

Bankers loved the speech and think it's bullish for the market, meaning bullish for them.  What does that tell you.

flaminratzazz's picture

I will say it again

hope is a dangerous thing..it will blind you

Erek's picture

"...meaning bullish for them.  What does that tell you.

It means bullshit for the rest of us.

dude duderson's picture

Trump's new job at the bank seems to be going great! I'm sure he'll be up for a promotion soon

werker's picture

YEAH,.... THUMBS DOWN,.... BUT KNOW THAT AMERICA GOT FUCKED AGAIN AND NOW IT IS PERSONAL        NICE INTRO NIGGER PREZ

flaminratzazz's picture

The pres is totally surrounded by the tribe right down to whom his kids married. We are fvked.

\There is no purge of these parasites..

They have and WILL bleed this country, and us to death.. just like history shows they have time and times before.

werker's picture

HE BETRAYED AMERICA.  At least we knew it was just a dirty nigger fucking us last time, NOW WE ARE TRULY GOING TO WAR.

flaminratzazz's picture

War for what outcome? Castro 2.0?

crossroaddemon's picture

Probably we're not. Who's gonna fire the first shot? You?

SmilinJoeFizzion's picture

the wave is cresting like Trumps hairline- ride it

order66's picture

Nevermind the 30 CAPE.

spastic_colon's picture

how many times have we said it doesnt matter what the "narrative" is.......the algos will get juiced......the VIX has been the biggest tell for 2 weeks! it was a giant squeeze being set up right infront of everyone and will now trickle back toward 10 for weeks!

SmilinJoeFizzion's picture

the vix is going to decapitate the shorts today-

Chupacabra-322's picture

The False Right / Left Paradigm.

werker's picture

I do this for roger cameron cartwright whom was murdered by genocidal negroes in portland.

I WILL NOT FORGIVE GENOCIDE

wobblie's picture

Of course Wall St loved his speech. He is on their team, just like Clinton. It was obvious from the start. The Donald may not be on script, but he poses no threat to the status quo. Only idiots like Liberals and Conservatives thought he was something different.

Tweedledum and Tweedledee must die.

https://therulingclassobserver.com/2016/11/12/twilight-of-tweedledum-and...

Son of Captain Nemo's picture

Thank goodness for circuit breakers and "threshold" constructed alarms to those "algos".

Nowhere to go but "UP"!

That is until General Mattis is given the "green light" to kill off a few thousand of his own men in Syria that will be the excuse to sell the American people the "next 9/11"!

I'll say it again! Will the American people buy it? Especially given the transition from a 16 year failed project called the "Global War on Terror" to a superior nuclear armed superpower?...

Cause the next one the Federal Reserve will finance will require many... many... many... more "assets" and "infrastructure" it no longer has than the worthless paper and faux market(s) they have been peddling since '08 to pay for it!

Steeley's picture

If it's worthless paper and faux markets(s), might as well do SOMETHING useful with it. Nukes make a lasting impression.

Chupacabra-322's picture

@ Son,

Depends on what your interpretation of a "16 year project called the Global War on Terror" is.

I faintly remember the Pure Evil Criminal Psychopaths who head the PNAC calling for a 100 year conflict. Very profitable from a Central Banking / Deep State / MIC Sadistic point of view.

Son of Captain Nemo's picture

"I faintly remember the Pure Evil Criminal Psychopaths who head the PNAC calling for a 100 year conflict. Very profitable from a Central Banking / Deep State / MIC Sadistic point of view."

Chup

Agreed. But what you are saying only applies when you control better than 75% of the World's energy resources that enforce the purchasing of that "energy" with a reserve currency...

Fast forward 45 years post-Nixon "Bretton Woods" and that model has long since expired when we were still #1 in just about everything AT HOME!

Again. "WHY" are the Saudi's going public with their oil corporation(s) and "WHO" is the #1 oil producer in the World in 2017???!!!

I rest my case!

Chupacabra-322's picture

Again. "WHY" are the Saudi's going public with their oil corporation(s) and "WHO" is the #1 oil producer in the World in 2017???!!!

Who? Russia.

Game, Set, Match.

Son of Captain Nemo's picture

"Who? Russia.

Game, Set, Match."

.

charlie303's picture
charlie303 (not verified) Mar 1, 2017 10:33 AM

Money flows into a free America buying stocks and not bonds.
These guys are scrambling to find an explanantion that fits.

screw face's picture

....Auhhhh Americana.

#BITCHEZZZZ

Chupacabra-322's picture

A room full of reasons to have Term Limits. How many Pure Evil Criminal #PizzaGate blackmailed Scum were in attendance? How the room didn't burst into flames from all the Satanic / Lucerferian Psychopaths is beyond me.

GRDguy's picture

A  sociopath's actions hardly ever match their words. 

Watch what they do; don't listen to their words.

small axe's picture

rather than the algos supporting the narrative, now the narrative changes to support whatever momentum algo is ramping the market. No one home but Skynet