The whole premise behind so called ‘Trumpflation’ was inflation by way of robust economic growth via infrastructure spending and tax reform. Healthcare bill failure aside, the market has been pricing in doubt for the past 3 months, accelerated the past 4 weeks.
While the Federal Reserve has been menacing markets will promised of unnecessary rate hikes, the market says otherwise and has been bidding up bond prices, while tanking the dollar and crude.
This could mean one of two things.
1. Growth is slowing. We’re barreling towards recession and the Trump trade is dead.
2. Markets are merely digesting gains, feigning weakness, fueled by democratic hissy fits and Russian hysteria theories concocted by incompetents.
I’m betting on the latter — but will keep a watchful eye on those three charts. Nothing is more important now.
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3. sell the news – there never was going to be infrastructure spending.
Stay long until Congress comes back from recess (2 weeks).
Mentioned $TS yesterday when discussing $X with the proprietor of this shop…..$TCW.to also mentioned is getting some love as well.
@Moosh….sand stocks hammering out bottoms here… like to see the top of the bases cleared on higher volume so I can raise my stops to break even.
With 2 of the 3 charts having an explainable relationship (bonds rising and dollar dropping due to market calling the Fed’s bluff on two more interest rate hikes), I’ll go with the later. No sign as of yet that growth has been slowing (it wasn’t that hot to start off with).