Note: Subscribers should reference the paywall material here for stocks that should give a good risk/reward scenario for bearish trades.
The Trump administration's legislative outlook is effectively a political desert, with no signs of material legislation either proposed or in sight. The multiple failures of the travel ban and rapid disintegration of the healthcare bill has effectively given Trump the mantle of the nations first lame duck president with only 2 months in office.
He has expended his political capital on multiple failed policy very early on, purposely alienated many factions, and is now mired in an FBI investigation - not to mention suffering from permanently impaired credibility stemming from an unending cornucopia of unsupported accusations, assertions and allegations (ie. he's lying too much).
What does this portend for investors in the short term?
The markets have gotten euphoric since the Trump election, apparently because someone believed what he was selling. Take a look at the broad market jump (powered greatly by the bank jump), and even more unbelievably the bank index jump.
Donald Trump's recent Tweet discusses how Russia has gotten stronger at the behest of President Obama.
For eight years Russia "ran over" President Obama, got stronger and stronger, picked-off Crimea and added missiles. Weak! @foxandfriends— Donald J. Trump (@realDonaldTrump) March 7, 2017
Let's take an empirical look at that claim.
The US stock markets, and the banking sector in particular, have been on a tear since Trump's election. Here's a factual look to determine if all of the capital appreciated hoopla is really worth it.
Continuing the conversation of whether it's time to short America, we investigate the administration's plans for protectionism and a tax holiday for corporate capital repatriation. The first question that needs to be asked is, "Who benefits from this, and why do they want it done?"
The animal spirits are whispering... They are calling into question the stability of the US in light of the significant geopolitical uncertainties introduced by the new US administration and how that plays into increasingly unprecedented global macroeconomic forces coming into play as the EU and US achieve their long sought after inflation in a world of negative interest rates and central bank sponsored asset purchases to distort the markets.
These spirits are whispering... Is it time to short the United Stages of America?
Trump's fiscal stimulus proclamations in addition to his border tax rhetoric puts a definitive boost behind the USD.
A border tax would hurt foreign companies that rely on cheap Amercian labor in Mexico would get hurt first, and then the increased costs will get passed on to the US consumer. This is all part and parcel of going after Mexico via a trade war/ This also doesn't take into consideration the fact that Mexico purchases a lot from the USA as well.
In social media and mainstream media, I often hear Donald Trump quoted (by himself, and others) as an extremely successful, self-made man. As an entrepreneur for nearly all of my life, hailing from a working class family - with a strong bent for numbers and analysis, I questioned this.