By Megan Davies and Rodrigo Campos
NEW YORK (Reuters) – The Trump Trade could start looking more like a Trump Tantrum if the new U.S. administration’s healthcare bill stalls in Congress, prompting worries on Wall Street about tax cuts and other measures aimed at promoting economic growth.
Investors are dialing back hopes that U.S. President Donald Trump will swiftly enact his agenda, with a Thursday vote on a healthcare bill a litmus test which could give stock investors another reason to sell.
“If the vote doesn’t pass, or is postponed, it will cast a lot of doubt on the Trump trades,” said the influential bond investor Jeffrey Gundlach, chief executive at DoubleLine Capital.
U.S. stocks rallied after the November presidential election, with the S&P 500 posting a string of record highs up to earlier this month, on bets that the pro-growth Trump agenda would be quickly pushed by a Republican Party with majorities in both chambers of Congress.
Investors extrapolated that a stalling bill could mean uphill battles for other Trump proposals. Trump and Republican congressional leaders appeared to be losing the battle to get enough support to pass it.
Any hint of further trouble for Trump’s agenda, especially his proposed tax cut, could precipitate a stock market correction, said Byron Wien, veteran investor and vice chairman of Blackstone (NYSE:BX) Advisory Partners.
I expect markets to continue lower well into next week, as those who’ve not yet sold “freak out” at the last minute…then sell into the waterfall. Sound familiar? Stocks will bounce sure…so if you are holding now…you likely lose a few nights sleep but “its too late to sell now”.
How many days / weeks ago did I suggest to “raise cash” and look for another great entry opportunity?
Yep, the long YEN position is working brilliantly.
I love this primate!!
Yes!!
And more importantly….for EVERYONE reading here THE CORRELATION WITH RISK!
You can file this away and keep it in your tool box as a most valued possession. Japan has been The United States b#%tch since passing the baton to the Bank Of Japan to keep the printing presses rolling. It’s YEN that has fueled this massive rise in U.S Equities ( and USD to a certain degree ) and this repatriation of yen to the BOJ when U.S assets are sold ( then USD converted to JPY ) will come like a tidle wave once global appetite for risk finally tips over.
Long USD holders have already gotten out of their positions. This is simply retail “hangers on” with their silly patriotism keeping it afloat.
Nice work man!!
Hi Kong mate would you be able to shoot me an email, i have a couple of private questions 🙂
thanks