A quick look across the landscape on OPEC/Oil hype day in the global markets.
Public optimism in oil was already turning up pre-OPEC. A production cut would get everybody lathered apparently, because rising prices are bullish after all. I pre-bought our heating oil at cheap prices this winter, so bring it on I guess. I am neutral on oil but a big surge from this hype could tilt it bearish. From Sentimentrader.com…
Disclosure (which I feel, given the post’s content, should be reiterated): I am not short even a single equity of any kind. I am only long selected stocks and cash at this time, but surely subject to a change of status in the future.
Why, did you know that in a note to clients Tom Lee wrote that Donald Trump’s term could usher in major bull market akin to those preceded by Ike and Reagan? He did, in a note to clients and the MSM really wants you to know about it! Now, there is a case that eventually his favored areas of Energy, Mining, Basic Materials, etc. will out perform. But that word “eventually” is an important one, unless you are a died in the wool trickle downer willing to ride the big correction or bear market that is likely first.
Trump win could produce major bull market – here’s what I’m buying
“Notably, the two longest bull markets in history 1953-1974 and 1982-1999 were preceded by a Republican ‘revolution,’” he wrote.
Lee likened Trump to the Republican presidents in this way; Eisenhower in the early 1950s invested in infrastructure, and Reagan pursued tax cuts and deregulation, Lee wrote, much like what Trump has promised to carry out in his presidency.
You know who they are; they are the ones who denied and denied the ginned up bull market in US stocks that nearly tripled under the socialist regime, circa 2009-2016. They are the ones who clung to gold well past the caution point last summer. They are (yes, it’s another snappy buzz phrase to either entertain, bore or annoy you… ) the S.O.D., AKA the Sons of Druckenmiller, AKA politically biased and newly activated market participants. Reference…
Druckenmiller: Get out of the stock market, own gold (this helped load the boat full of ill-fated gold bugs in the spring).
The night Trump was elected president, Stanley Druckenmiller dumped gold (this signaled the beginning of reparations to gold’s sentiment profile). He also became very bullish on the stock market; go figure.
We have been talking about how bullish the US stock market is. It has been bullish uninterrupted for most of 2016 and that includes the Brexit buying opportunity. We then expected and got a test of major support. Now, with the Trump whipsaw and reversal we have the 2nd thrust in breadth and breakout, after Brexit. Here’s the broad market view we keep tabs on. It never went bearish. All it did was test support across various indexes.
I’ve made a conscious decision to pretty much move on from the silliness of Trump towers, erections, pants tents and other Trump-centric commentary after having fully wallowed in it last week and incorporated it into NFTRH 421, which is a serious piece of work that also worked in these themes. I am actually very concerned that we have put an unqualified spectacle in the White House; a product of American TV and leveraged ‘capitalism’. A media star.
Here is a screen shot of page 41. It’s the Society of the Spectacle.
This is the opening segment to this week’s edition of Notes From the Rabbit Hole, NFTRH 421, a 48 page work-through of the immediate post-Trump landscape. While we had fun with the Trump hysteria throughout an ultimately serious analytical report, I look forward to marinating in the post-hysteria atmosphere and coming up with well defined market directions, whether they be born of new macro fundamentals to be, or contrary sentiment driven possibilities, which are also in play…
People who have read me for years know that all sorts of buzz phrases (Inflation onDemand, Armageddon ’08, etc.) and some off color writing can find their way into my work, especially when writing publicly. I do not think highly of the Federal Reserve system, the average politician or even many US Presidents through my lifetime. Formally, I do respect the office and ultimately by extension, even a President I may not happen to like. It’s been that way much more often than not, after all.
There are more Trump Towers being erected by certain indexes (ref. Uncle Buck’s pants tent noted yesterday in an HUI update). As an aside, say what you will about the man, but the name and the persona are a natural for we financial writers and others not tasked to be sensitive about politics or politicians. I mean, how much fun could one make of Obama, a person who comes across as dignified and idealist? Bush was a little better, but even he was no Trump. The Clintons? Getting warmer. But Trump is a new thing all together, almost transcendent; more concept than man. I like this, speaking as a writer. Love it, actually.
On a more serious note, I think he is eventually going to be seen in a lesser light, as the true believers who thrust him upon their tired shoulders find out that promises are one thing and reality is quite another; if anything, he will deliver inflation, which adversely affects… anyone? Bueller?… the middle and lower classes. Asset owners – like Trump – always win and those who go paycheck to paycheck, always lose in inflationary/reflationary regimes. So if the hype proves true and exported jobs are repatriated, roads, bridges and walls are erected, tax breaks for big corporations are implemented and yet more deficit spending is enacted, it is not the true believers who are going to benefit.