Displaying items by tag: Trump

(Washington)

Donald Trump may be in some very hot water soon. Stormy Daniels’ lawyer has just moved to interview the president under oath in relation to her lawsuit against him. Her lawyer, Michael Avenatti, has just asked a California court for the right to depose the president and his lawyer. The president’s lawyer, Michael Cohen, reject Daniels’ claim, defending his payment to her saying “just because something isn’t true doesn’t mean that it can’t cause you harm or damage”.

FINSUM: We suspect this request will not actually lead to Trump speaking under oath, but that does not mean something else in the case (or others) will not eventually put the president in that position.

(Beijing)

Well the market took a big sigh of relief yesterday, with prices swinging back massively. One of the big reasons why was less fear over a possible trade war. In particular, China took a much more conciliatory approach this week. The country announced it would ease foreign investment rules and buy more American semiconductors, a stark move that contrasts the American push towards big tariffs on Chinese imports to the US.

FINSUM: The bottom line in the US tussle with China over tariffs is that the US has a $375 bn trade deficit to Beijing, which means we have much less to lose than them. This is probably the reason Trump referred to trade wars as easy to win.

(Washington)

While all the current political anxiety seems to be centered around the midterm elections and what future that may hold for Republicans, the real trouble could be for Trump in 2020, says Bloomberg. According to economists, all signs are pointing to a recession in 2020. While the current tax cuts and fiscal stimulus will insulate the economy this year and next, “Fading fiscal stimulus, higher and rising interest rates, and cresting world demand could leave the economy vulnerable to a contraction -- just in time for the presidential campaign”, says Bloomberg.

FINSUM: A recession starting in the year of reelection would not be good for an incumbent president, and the timelines do seem to make sense.

(Washington)

Though he had remained silent on the issue for three days, Senate Majority Leader Mitch McConnell has finally spoken out on the Trump-Mueller tension. McConnell held a press conference yesterday to commend the job Robert Mueller is doing and to admonish the President to let him finish his investigation. McConnell said Mueller “should be allowed to finish his job”, and that “I don’t think Bob Mueller is going anywhere … I have a lot of confidence in him”. Republican Senator Lindsey Graham also said that if Trump tried to fire Mueller without cause than it would be an impeachable offense.

FINSUM: We think Trump is sharp enough not to try to fire Mueller as it would create an absolute political nightmare.

(New York)

Many investors might be thinking that small caps look like a good buy at the moment. Between trade tariffs, the new tax package, and the president’s general focus on economic nationalism, small caps seem to have a lot of wind in their sails. But the big question for investors should be whether they are overvalued. The Wall Street Journal says the asset class is overvalued, as the market has gotten overly optimistic about small cap growth prospects and is valuing the stocks too richly versus their current earnings, especially given rising interest rate risk in the economy.

FINSUM: The WSJ used an unusual valuation metric to assess the sector (EV/EBITDA), but overall the sector looks richly valued. So is every other asset class.