Market’s need to sell off to MAGA

Today marks the 1st full trading day of President Trump’s presidency.

Let’s put some markers down before the open for assessment later.

  • Dow Jones: 19,827.25
  • S&P 500: 2,271.31
  • Nasdaq: 5,555.33
  • US 10-year note yield: 2.468%

If we are higher on equities six months from now, we can say Trump’s Put America First has been derailed. It will mean we have more of the same. The continuing bail out of Wall Street banks as QE bonds are rolled over by the Fed through the banks.

If there is going to be change, then there is needs to be a Come To Jesus moment for the markets.

Should cheap money continue fueling stock buybacks, which has proven over the last six years not to be the way to grow an economy.

There needs to be a rotation in the markets to companies with growing revenues and not companies just running up its earnings per share through the retirement of shares from buybacks.

The bond market holds the key I believe. We could see a 10-year below 2% in short order on a stronger dollar as global fear trade floods US Treasury market.

I don’t believe Janet Yellen will touch rates in the first 6 months of this year, just like the last two years, until Trump’s new policies play out.

Let’s see where we are on March 23 and then June 23 of this year. We could be at 15K on the Dow, which may crimp short-term investments, but it could be a solid bottom to build from.

 

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