Most Popular
1. It’s a New Macro, the Gold Market Knows It, But Dead Men Walking Do Not (yet)- Gary_Tanashian
2.Stock Market Presidential Election Cycle Seasonal Trend Analysis - Nadeem_Walayat
3. Bitcoin S&P Pattern - Nadeem_Walayat
4.Nvidia Blow Off Top - Flying High like the Phoenix too Close to the Sun - Nadeem_Walayat
4.U.S. financial market’s “Weimar phase” impact to your fiat and digital assets - Raymond_Matison
5. How to Profit from the Global Warming ClImate Change Mega Death Trend - Part1 - Nadeem_Walayat
7.Bitcoin Gravy Train Trend Forecast 2024 - - Nadeem_Walayat
8.The Bond Trade and Interest Rates - Nadeem_Walayat
9.It’s Easy to Scream Stocks Bubble! - Stephen_McBride
10.Fed’s Next Intertest Rate Move might not align with popular consensus - Richard_Mills
Last 7 days
US Presidential Election Year Stock Market Seasonal Trend - 29th Nov 24
Who controls the past controls the future: who controls the present controls the past - 29th Nov 24
Gold After Trump Wins - 29th Nov 24
The AI Stocks, Housing, Inflation and Bitcoin Crypto Mega-trends - 27th Nov 24
Gold Price Ahead of the Thanksgiving Weekend - 27th Nov 24
Bitcoin Gravy Train Trend Forecast to June 2025 - 24th Nov 24
Stocks, Bitcoin and Crypto Markets Breaking Bad on Donald Trump Pump - 21st Nov 24
Gold Price To Re-Test $2,700 - 21st Nov 24
Stock Market Sentiment Speaks: This Is My Strong Warning To You - 21st Nov 24
Financial Crisis 2025 - This is Going to Shock People! - 21st Nov 24
Dubai Deluge - AI Tech Stocks Earnings Correction Opportunities - 18th Nov 24
Why President Trump Has NO Real Power - Deep State Military Industrial Complex - 8th Nov 24
Social Grant Increases and Serge Belamant Amid South Africa's New Political Landscape - 8th Nov 24
Is Forex Worth It? - 8th Nov 24
Nvidia Numero Uno in Count Down to President Donald Pump Election Victory - 5th Nov 24
Trump or Harris - Who Wins US Presidential Election 2024 Forecast Prediction - 5th Nov 24
Stock Market Brief in Count Down to US Election Result 2024 - 3rd Nov 24
Gold Stocks’ Winter Rally 2024 - 3rd Nov 24
Why Countdown to U.S. Recession is Underway - 3rd Nov 24
Stock Market Trend Forecast to Jan 2025 - 2nd Nov 24
President Donald PUMP Forecast to Win US Presidential Election 2024 - 1st Nov 24
At These Levels, Buying Silver Is Like Getting It At $5 In 2003 - 28th Oct 24
Nvidia Numero Uno Selling Shovels in the AI Gold Rush - 28th Oct 24
The Future of Online Casinos - 28th Oct 24
Panic in the Air As Stock Market Correction Delivers Deep Opps in AI Tech Stocks - 27th Oct 24
Stocks, Bitcoin, Crypto's Counting Down to President Donald Pump! - 27th Oct 24
UK Budget 2024 - What to do Before 30th Oct - Pensions and ISA's - 27th Oct 24
7 Days of Crypto Opportunities Starts NOW - 27th Oct 24
The Power Law in Venture Capital: How Visionary Investors Like Yuri Milner Have Shaped the Future - 27th Oct 24
This Points To Significantly Higher Silver Prices - 27th Oct 24

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Trump Trade Will Break in 2017

Stock-Markets / Financial Markets 2017 Jul 07, 2017 - 06:17 PM GMT

By: Adam_ODell

Stock-Markets The first half of 2017 is over… and, boy, was it one for the history books!

American politics dominated the global discussion, as speculation ran rampant over who would emerge as the winners and losers of a Trump presidency.

Surprisingly (or not!)… the media’s storylines have likely led naïve investors into some of the worst-performing investments so far this year.

Essentially, everything that was up “huuuuge” from Election Day through year end… is now lagging behind. And everything that struggled to digest the reality of Trump’s win… is now leading the pack.


I’m taking some snarky enjoyment in the confusion of the masses.

For one, I’ve told you often that reading the news is the worst thing you can do for your investment portfolio.

And when you look at the performance of my research trading services – Cycle 9 Alert and 10x Profits – you can see plainly how my simple, systematic approach to investing is far better than taking tips from CNBC.

My Cycle 9 Alert readers are averaging a 41% profit, per trade, so far this year. We’ve capitalized on a number of “odd” opportunities, ones that flew in the face of the media’s storylines.

My 10x Profits readers, too, have killed it in this crazy market. By trading what I call “volatility booms and busts” – which we play with just two ETFs – we’ve milked a 20% profit from the market’s wild swings.

Both of my strategies are highly flexible, being “tactical” and “short-term” in nature.

Let me show you why that’s been particularly helpful this year…

Trump’s bravado, essentially, led everyone to believe that the United States was about to take over the world (as if we aren’t already top dog).

That expectation can be seen clearly in the performance of major markets, between Trump’s November 8 election win and the end of 2016.

First, the U.S. dollar soared. It gained nearly 6% in under two months – a huge move for a major currency. All other global currencies were down over the same time.

Second, anticipating the 3% to 4% GDP growth Trump had promised, U.S. Treasury yields jumped more than 30%. That sent U.S. Treasury bond prices more than 8% lower.

No one was interested in safe yield. Instead, everyone piled into U.S. small-cap stocks, which gained a whopping 14% in two short months.

Meanwhile, global markets got left in the dust during the first two months of the so-called “Trump Rally.” World stocks gained a measly 1.3%. Emerging market and Chinese stocks lost between 5% and 6%.

And Mexican stocks, with all that “wall” talk, got crushed like maize in a tortilla press. They lost 16% in the wake of Trump’s win!

There was one foreign beneficiary of Trump’s rhetoric. Russian stocks gained almost 18% in sympathy with the cozy relationship that was, at that time, budding between Trump and Putin.

But outside of Russia, U.S. markets completely dominated global markets in the immediate aftermath of Trump’s win.

And then, in 2017, that trend completely reversed.

Year to date…

The U.S. dollar is down more than 7%. All foreign currencies are positive.

U.S. Treasury yields are falling, with 3-4% GDP growth looking unlikely.

U.S. small-cap stocks are up just 4%, while emerging markets are up 16%.

Oh, and Mexican stocks… they’re up 24% this year – the best of the bunch.

And Russian stocks… they’re down 12% – the worst of them all.

What an epic reversal of fortunes, right!?

Clearly, investors bought the media’s initial storylines – “hook, line and sinker” – in the immediate aftermath of Trump’s election. And, indeed, hopping a ride on the early stage of that Trump Rally was quite lucrative.

But any investors who stubbornly stayed invested in those trends have been sorely disappointed in 2017.

Everything that was working in late-2016… is now broken. And everything that was sucking wind… is now leading the pack!

And if you learn nothing else from this, I hope it drives home the point that this is not a “buy-and-hold” market we’re in.

Yes, the bull market is alive and well (for now).

But you can’t just buy anything… nor hold it indefinitely.

Instead, you should be looking to use simple, “tactical” strategies – ones that position you in the strongest markets at any given time… ones that get you in and get you out, with handsome profits, before the market reverses.

Oh… and stop reading the news!

Adam O’Dell

http://economyandmarkets.com

Copyright © 2017 Adam O’Dell - All Rights Reserved Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.


© 2005-2022 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in