Displaying items by tag: Trump

(New York)

The very public grudge match between JP Morgan and President Trump appears to be continuing, albeit in a more subtle way this week. Strategists at JP Morgan went on the record saying that one of the biggest risks to the market right now is that Trump overestimates the US economy and makes a major miscalculation in his trade war with China. The big worry is that Trump takes the trade war too far and sends China into a recession, which would then reverberate and cause a global reversal, shocking markets.

FINSUM: China experiencing a significant downturn could cause a chain reaction amongst EM and developed economies which could come back to sting the whole western world.

(Washington)

The special counsel investigation that started as an investigation into the Trump administration’s connections to Russia, but has blossomed into an all-encompassing dragnet, has been quite quiet of late. However, the FT reported today that Trump’s former lawyer Michael Cohen has been cooperating with Mueller and his team, particularly on the topic of Russian interference. According to Cohen’s lawyer, his client has provided “critical information” to the special counsel regarding Russia.

FINSUM: It is hard to know how whether the information he passed along was valuable, but it could be a hint that there is another bombshell about to hit headlines.

(New York)

We run a lot of bearish stories in FINSUM, and with good reason—there are a lot of them out there and we feel the need to share those views with advisors and investors. However, when there is a credible bullish story, we jump at the chance to run it. Today we have one. Robert Shiller, perhaps the godfather of doom and gloom with his CAPE ratio, has just made an uncharacteristic statement: he says that stocks may rise much higher before eventually falling. The Nobel laureate says “The stock market could get a lot higher before it comes down … It’s highly priced, but it could get much more highly priced”. Shiller had previously been warning (last year) about how overpriced the market was. Shiller says the reinvigorated market has to do with President Trump’s pro-business drive.

FINSUM: It is interesting to hear someone as typically bearish as Shiller saying that stocks may rise a good deal more. Something to pay attention to.

(San Francisco)

The market has periodically started to worry about the regulation of the tech industry. For a while that felt a bit premature, but given recent events, it is starting to feel more real. For instance, the FTC has just begun a marathon of hearings, which will run through November, into the state of competition and consumer protection in the digital economy. The hearings are about more than tech though, as they are fundamentally about inequality and worker’s rights across the whole of the economy. The head of the FTC said “In my view, basing antitrust policy and enforcement decisions on an ideological viewpoint (from either the left or the right) is a mistake”.

FINSUM: These hearings seem like the first stage of what might prove to be big changes for anti-trust policy in the US. If changes do happen, we believe they will be much more far-reaching than just for tech.

(Washington)

It would be an understatement to say that a lot is riding on the midterms. Control of Congress is at stake, and within it, the whole policy agenda of the country. The stakes are even higher because of how politically divided the country is. Many think the Democrats will take the house but lose the Senate, resulting in a split Congress. This puts many investors at ease because it could block some of the right’s more extreme impulses (such as those against free trade). However, there is reason to worry that Republicans might fare far worse. That reason is that Donald Trump is the most unpopular president ever in such a buoyant economy. According to one polling expert, “There’s a huge disconnect … The economy doesn’t seem to be dominating in a way that it often does in elections”.

FINSUM: Our worry for the Republicans is that Trump is making the midterms more about himself than the party, and given the high degree of disapproval, that approach could really end up costing Republicans in the midterms. Consider an all-blue Congress come November a considerable tail risk.