The Market Has Already Started to Dump Trump

[question everything]

Markets responded to Donald Trump’s rambling news conference on Wednesday by dumping Trump. The dollar and pharmaceutical and biotechnology stocks were sold, bonds were bought and stocks once regarded as out of favor with the president-elect outperformed.

This could be taken as a sign that investors prefer their presidents to be presidential. But it was also a confirmation of a move under way in the stock market for more than a month. The post-election Trump rally ran out of steam by mid-December, as hopes of a boom faded.

For the first month after the election, the market anticipated faster economic growth. Cyclical stocks most sensitive to the economy grew fast, while defensive shares best able to protect against a downturn lagged far behind. In the past month the optimism evaporated, with defensive sectors beating cyclicals and Treasury yields coming down slightly (in spite of a boost to cyclicals this year as economic data beat expectations).

There is more to the Trump reverse than just a changing bet on economic growth, though. The market’s change of mind is visible across many of the stocks that became ways to bet for or against the new administration:

Defense companies initially jumped, helped both by traditional Republican commitments to military spending and Mr. Trump’s promise during the election to end the defense cuts imposed by the 2013 budget sequester. But the 9% surge in the sector that took Boeing, Raytheon, General Dynamics and Lockheed Martin up far faster than the market fell short in mid-December. Mr. Trump took to the 21st century bully pulpit– Twitter–to attack the cost of Lockheed’s F-35 fighter jet, and after that the sector went nowhere.

Infrastructure spending is one of Mr. Trump’s signature plans. Not surprisingly, builders and construction suppliers soared after the election, with the construction-materials sector up 13% a month later. U.S. Steel leapt 72%, and U.S. Concrete 30%, while many smaller suppliers had double-digit gains. Since then the sector’s fallen 4%, as doubts set in about how much the government will actually spend, and how fast.

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http://www.wsj.com/articles/the-market-has-already-started-to-dump-trump-1484238205

[cilla4progress]

1. So finally people are realizing

THERE IS NO PIVOT!!!

Fuck why does it take some people so long?

[Warpy]

2. Healthcare stocks are about to crater

but oil and industrials will do well for a while.

Obama will veto all the bullshit coming out of the ending days of this idiot stuffed Congress, but the next one is going to be just as full of complete fools so it will be back. Still, few will want to risk their money on pharmaceuticals, corporate hospitals, biomedical equipment manufacturers, or anything else connected with this huge industry.

[unblock]

6. the new congress started january 3, and i don't think they're putting anything on obama's desk.

i wouldn't think they'd bother to pass anything until donnie's sworn in.

[Warpy]

8. Oh, yeah, brain fart, maybe I should

go put my sore back onto a heating pad and read a trashy book. Still, I don't see how they can delay this stuff for a week, having been so eager to pass it all so quickly.

Still, if they do, I'm damned glad I own few health care shares.

Fucking idiots.

[unblock]

9. Just be careful with those shares!

Russopublicans want to get rid of the taxes and maybe the mandate but keep the popular features like no pre-existing conditions. This could spell disaster for hospitals and/or insurance companies.

They've got power but don't know how to use it properly.

[Warpy]

10. No shit. They're just running on spite and a desperate need for revenge

I just hope they fuck things up so badly that party is finished forever. It's just horrible knowing how many people they're going to kill in the process.

As for the shares, they're few and I'll keep 'em as long as they're still earning something, then take a tax loss. I have the luxury of doing things like that these days since I no longer have to plan for the long term.

[unblock]

13. shrub did that already. and then the republicans that were left

insisted on doing everything they could to finish fucking things while trying to keep obama from fixing things.

and instead of declaring their party an irrelevant joke and ignoring their clown nominee, our media decided to give them 90% of the airtime and use the rest to constantly smear one of the most qualified candidates in history, thereby rewarding their failure with all three branches of government.


i don't know what it will take to put the russopublican party out of business. they're certainly safe as long as they've got their propaganda arm working overtime for them.

[bettyellen]

3. I'd love Swags commment on this!

[Dawson Leery]

4. The market will not tolerate Donnie's call outs

against business for everything they do.

[unblock]

5. markets respond to news.

the political news has been rather limited -- donnie won. this implied a great many things, much of which probably is good for corporate profits, so the market went up. but this only explains a day or few right after the election.

there's really not been much political news since then that would really push up stock prices. there's continued speculation as to corporate tax cuts and so on, but the guesses haven't evolved much since november 9. donnie's gaffes don't make stock prices go up, and his actual cabinet picks (as opposed to reasonable guesses on november 9) hardly affect stock prices positively either.


what news there has been has mostly been that the economy is in better shape than we thought it was on november 8, with the third quarter gdp growing at a 3.5% annual rate. supporting this has been a steady stream of mostly good news from corporates.


in short, the so-called "trump rally" is mostly due to obama and the economy that's been growing steadily for 8 years now, and the market has reflected that by nearly tripling in that time. it's simply continuing to respond to the ongoing good news and good performance.

donnie can take credit for the first day or few of the "trump rally". after that, he deserves no credit at all. whatever news there's been from donnie, it's only served to worry people, particularly in regards to igniting a protectionist tarriff war, e.g.

[calguy]

7. Buy the election.....

Sell the inauguration.

[TeamPooka]

11. Might be time to actually buy gold, guns, canned goods and ammo. I understanhd it now. nt

[Warpy]

14. Forget the guns and ammo, stock up on antibiotics

and bandages, shoes, cloth, and every other damned thing we'll run out of fast when the rest of the world blockades us as a rogue nation and refuses to trade with us.

And no, we can't make this stuff any more. The infrastructure was exported, sold for scrap, or left to rust in place.

[Dawson Leery]

15. I do not believe in the gold standard.

Still, if Donnie trashed the economy, gold is going through the roof.

[ananda]

12. That explains it.

I have some money in bonds, and that portfolio
finally went up after being a bit down.