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2017/09/28 Commentary: Trump Tax Tract

September 28, 2017 Rohr-Blog Leave a comment

2017/09/28 Commentary: Trump Tax Tract   

© 2017 ROHR International, Inc. All International rights reserved.

Extended Trend Assessments reserved for Gold and Platinum Subscribers

Commentary: Thursday, September 28, 2017

Trump Tax Tract   

It has been quite a week with far flung influences impacting all asset classes. In the first instance those include the US tax reform announcement that in part had such a strong impact due to the Republican Senate and House and the Trump administration collaborating on something ahead of time instead of hoping their leadership would coalesce around a core idea. The lack of that same sort of coordination was at least partially responsible for the failure of the Republicans healthcare insurance reform efforts, and there are hopes that it will be different with the even more important tax reform effort. And those hopes were amply reflected in the strength of the US equities and US dollar as well while weighing on the govvies; all due to the prospect of greater growth from the further encouragement for individuals to spend tax savings and businesses being expected to invest.

While we cannot argue with a proposition that has proven true again and again from the Kennedy era onward, this particular tax reform proposal has some internal contradictions along with political hurdles that are greater than previous efforts. So there are pros and cons where the cons are either especially troubling or outright ploys. While we will get back to a more extensive discussion below, it is important to note the most contentious of the ‘streamlining’ proposals that also raises quite a bit of the revenue to fund the overall tax cuts is the elimination of state and local income tax deductions.

On one hand, this is a rational adjustment. On a politically conservative philosophical level as well as a practical consideration, why should the rest of the country underwrite the revenue collected by those local governments? It is a direct cost to the rest of the country in the form of the greater revenues collected from other states. And yet….   

Authorized Silver and Sterling Subscribers click ‘Read more…’ (below) to access the balance of the opening discussion. Non-subscribers click the top menu Subscription Echelons & Fees tab to review your options. Authorized Gold and Platinum Subscribers click ‘Read more…’ (below) to also access the Extended Trend Assessment as well.

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Rohr Market Research Tagged analysis, bond, brackets, budget, comments, confluence, Congress, debt, deduction, Democrat, economic, election, employment, equities, Euro, Europe, exemption, Fischer, fixed income, Foreign Exchange, GDP, Gilt, govvies, Graham, healthcare, Indicators, inflation, local, macro, macro-technical, majority, market, markets, McConnell, outline, reform, Republican, Ryan, S&P 500, Sasse, Scott, Senators, state, T-note, tax, tax reform, technical, TREND, Trump, US dollar

2017/09/21 Commentary: Fear of Fed Redux

September 21, 2017 Rohr-Blog Leave a comment

2017/09/21 Commentary: Fear of Fed Redux   

© 2017 ROHR International, Inc. All International rights reserved.

Extended Trend Assessments reserved for Gold and Platinum Subscribers

Commentary: Thursday, September 21, 2017

Fear of Fed Redux   

As we had suspected in our Wednesday morning Commentary: Fear of Fed post, ‘Fed dread’ is back. That was just an extension of the somewhat stronger economic data releases in spite of weaker important US data last Friday. Yet, ever since Hurricane Irma was a bit less devastating to Florida than had been feared, the US equities were keeping the bid and govvies were under pressure since the beginning of last week. Especially in the context of higher than expected UK inflation numbers initially followed  by others, the govvies finally had to be more concerned about that than responsive to the near term economic weakness engendered by the US dual storm damage.  

Of course, this took on extra importance in the context of the upcoming FOMC meeting that culminated in Wednesday afternoon’s statement and projections revisions, followed shortly thereafter by Chair Yellen’s press conference. And we have followed our classical protocol that the knee-jerk reaction to the FOMC impact is less important than the 24-48 hour trend evolution the markets need to reflect their full response. That has been very telling in the US dollar as well, and especially the govvies that have swung down into their most critical position since early July.

That is the reason we opened with a weekly front month T-note future continuation chart illustrating the consideration of whether the December T-note future will respect overall up channel support from the 122-29 mid-December post-US election trading low. While it has penetrated that up channel support to some degree, as always with these sorts of things it is more important whether it exhibits a sustained violation of that trend support than whether it drops temporarily below it. And after laying out all of the background on whether the Fed’s shift into reducing its balance sheet will be a telling influence in our previous post, this post will be more market trend oriented after some brief further review of just what the Fed will be doing.

Authorized Silver and Sterling Subscribers click ‘Read more…’ (below) to access the balance of the opening discussion. Non-subscribers click the top menu Subscription Echelons & Fees tab to review your options. Authorized Gold and Platinum Subscribers click ‘Read more…’ (below) to also access the Extended Trend Assessment as well.

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Rohr Market Research Tagged 2015, 2016, balance, balance sheet, bank, barchart, Bernanke, bond, bonds, Bund, central, central bank, comments, confluence, Deflation, Disinflation, dovish, equities, Euro, Europe, Fed, fixed income, FOMC, Foreign Exchange, FTSE, GDP, Gilt, govvies, Gross, growth, hawkish, hike, Indicators, inflation, interest, interest rate, macro, macro-technical, Pound, Projections, psychological, QE, QT, reduction, reform, S&P, S&P 500, sheet, statement, stimulus, T-note, technical, TREND, UK, US dollar, USD, Yellen

2017/09/20 Commentary: Fear of Fed

September 20, 2017 Rohr-Blog Leave a comment

2017/09/20 Commentary: Fear of Fed   

© 2017 ROHR International, Inc. All International rights reserved.

Extended Trend Assessments reserved for Gold and Platinum Subscribers

Commentary: Wednesday, September 20, 2017

Fear of Fed   

Yep, ‘Fed dread’ is back. And we are not talking about Janet Yellen deciding to go for a fashion change and switch her hairstyle to dreadlocks. Various market tendencies outside of a continual storm reconstruction driven bid in US equities (see Thursday, August 31st Commentary: When It Rains… and last Thursday’s Commentary: Storm Surge! posts for much more on that) reflect some concerns about the potential for the FOMC to tighten in a way that will weigh on the govvies and also affect foreign exchange. The latter has seen a modest recovery in the US Dollar Index from the violation of it major 2.5 year trading low at 91.91 on the Close two weeks ago. And concern about the FOMC’s next moves is likely behind those two market tendencies.

Yet as explored in our Thursday, July 27th Commentary: Balance Sheet Chicanery post, the latitude is narrow for the Fed to move in any meaningful way on its two primary fronts: further base rate increases (almost nonexistent at present), and balance sheet reduction that is the primary bogey man worrying the markets right now. While the latter is the more likely to possibly be definitively outlined and then discussed at today’s press conference, on all recent assessments by Fed governors and outside analysts it will be so incremental as to be more psychological than quantitatively critical.

This is also the same as noted in our Commentary: Balance Sheet Chicanery post, and we will be revisiting the reasons behind no likelihood of a rate hike and why the balance sheet reduction is psychological. Yet, let’s give due respect to that psychological component, as the govvies are prone to reacting to future influences as well as current conditions. Consider the major drubbing the US T-notes experienced after both Fed Chair Bernanke’s QE ‘taper’ comments in May 2013, and the hit they took after the last US election even though they managed to rally back in each case (much more below.)

However, prior to delving into all of that, this morning saw the release and presentation of the OECD’s latest Interim Economic Outlook. It seems to confirm that a general global growth cycle is indeed in progress in the short term. Yet it also points out the ways in which the medium term is less assured. The lack of global investment, rising trade barriers, a lack of higher wages typically accompanying a sustained recovery (also important for the Fed), need for further systemic reforms and other key factors might still restrain the recovery. That remains a key focus for the Fed as well.   

Authorized Silver and Sterling Subscribers click ‘Read more…’ (below) to access the balance of the opening discussion. Non-subscribers click the top menu Subscription Echelons & Fees tab to review your options. Authorized Gold and Platinum Subscribers click ‘Read more…’ (below) to also access the Extended Trend Assessment as well.

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Rohr Market Research Tagged 2015, 2016, balance, balance sheet, bank, barchart, bond, bonds, Bund, central, central bank, comments, confluence, Deflation, Disinflation, dovish, equities, Euro, Europe, Fed, fixed income, FOMC, Foreign Exchange, FTSE, GDP, Gilt, govvies, Gross, growth, hawkish, hike, Indicators, inflation, interest, interest rate, macro, macro-technical, OECD, Pound, Projections, psychological, QE, QT, reduction, reform, S&P, S&P 500, sheet, statement, stimulus, T-note, technical, TREND, UK, US dollar, USD, Yellen

2017/09/14 Commentary: Storm Surge!

September 14, 2017 Rohr-Blog Leave a comment

2017/09/14 Commentary: Storm Surge!

© 2017 ROHR International, Inc. All International rights reserved.

Extended Trend Assessments reserved for Gold and Platinum Subscribers

Commentary: Thursday, September 14, 2017

Storm Surge!   

As it turned out the sheer destructiveness of Hurricane Irma’s winds were more of a problem for a far broader area than the limited area affected by Hurricane Harvey in Texas. Yet water damage from Harvey becoming a tropical storm feeding on the warm Gulf of Mexico water was repeated by Irma’s winds whipping up major waves, and then rainwater damage from just sheer flooding through the entire state of Florida. That is due to the degree to which it was a super-storm so large (approximately 400 miles across) for much of its existence. That meant during its move north up the west side of Florida’s long 150-mile-wide peninsula (i.e. excluding the upper panhandle) its winds reached out well into the Atlantic.

That brought an actual storm surge onto the eastern side of the state, most notably to heavily populated Jacksonville as the St. John’s River overflowed its banks. In fact, there is still significant standing water in central Jacksonville that the authorities warn will take up to another week or more to subside. The problem there is much as we had noted for southeast Texas: it is the watershed into which waters from inland in the Carolinas will continue to drain via the river, in addition to being affected by daily tidal shifts. The last Jacksonville flooding of this magnitude was in 1846.

Yet that destructive surge is not the one we are referring to in the title of this post. That is the ‘surge’ in US government spending that will naturally occur (as surely as the weather) to assist with rebuilding of the hurricane and storm damaged areas. Irma was a record hurricane on quite a few measures, even if the greater reconstruction spending will likely be in response to Harvey’s southeast Texas flooding. The latter will likely set records beyond the Hurricane Katrina expense, and their combined cost will surely be a major new reconstruction record in the hundreds of billions of dollars.

More below, yet only after the degree to which, along with ‘other factors’, that is driving trends in each asset class. That of course includes the equities looking forward to the major US cleanup and reconstruction building boom, the govvies becoming a bit negative after the recent rally, and the US dollar possibly remaining weak overall.  

Authorized Subscribers click ‘Read more…’ (below) to access balance of the discussion. Non-subscribers click the top menu Subscription Echelons & Fees tab to review options. As this is a ‘macro’ assessment, Market Observations remain the same as last weekend’s WEEKEND: Truculent Trump Tribulations post that were updated (lower section) Tuesday morning, and there is no Extended Trend Assessment in this post.

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Rohr Market Research Tagged analysis, bill, bond, budget, Caribbean, ceiling, comments, confluence, Congress, CPI, Deal, debt, Debt Ceiling, Democrat, economic, election, employment, equities, Euro, Europe, fixed income, flood, Florida, Foreign Exchange, Galveston, GDP, Gilt, govvies, Harvey, Homestead, Hurricane, Indicators, inflation, Irma, Jacksonville, Keys, macro, macro-technical, market, markets, negotiator, PPI, reconstruction, Republican, S&P 500, Spending, St. John’s, storm, storm surge, surge, T-note, technical, Texas, TREND, Trump, US dollar

2017/09/09 WEEKEND: Truculent Trump Tribulations

September 10, 2017 Rohr-Blog Leave a comment

2017/09/09 WEEKEND: Truculent Trump Tribulations

© 2017 ROHR International, Inc. All International rights reserved.

Extended Trend Assessments reserved for Gold and Platinum Subscribers

WEEKEND: September 9, 2017

Truculent Trump Tribulations   

First there was Hurricane Harvey seriously flooding southeast Texas as a tropical storm, soon to be followed by major Hurricane Irma slamming the entire Florida peninsula. Yet along the way there has been another storm brewing that became more aggressive this week as well: Hurricane Donald!! While not physical in nature, US President Donald Trump has not been at all shy about dumping cold water readily on both foes and friends (with sharply shifting sentiment on who is in each category.) And he is known as one of the windier practitioners of aggressively blowing against anyone who he disdains, especially those who differ with his views of the moment on any given person or topic. And for those not already aware, that is exactly what the term ‘truculent’ means (according to the Google lookup): eager or quick to argue or fight; aggressively defiant. Sounds about right to us.

In the case of the US President that is particularly interesting due to his penchant for shifting what seemed previous to be very strong positions. His hair in the opening graphic is not the only thing that can be windblown. It seems consistent with the major positions swirling around in his head that can rapidly shift to and fro. So anyone who is against the President one day might be someone he lauds for the same positions in another phase. And this is just what transpired this week on his quick compromise with Democratic Party leaders, praising their cooperation on the US debt ceiling and budget deals.    

We will allow there were some good reasons regarding multiple storm preparation and relief that meant any significant stall in agreement on those two issues was neither acceptable nor realistic. Yet the speed with which the President gave in to accepting the full Democratic position was breathtaking (more below.) While Republican leaders are putting a good face on it, the rumor is that behind closed doors they are seething.

And we can see where the President’s next serial rapid position shift is also having a market impact. After so many shifts that abandoned his staunchest alleged conservative positions along with administration reshuffles, might it be possible that the wider world is viewing the US as ‘rudderless’ under Trump? That seems to have market implications… especially on the further drop in an already weak US dollar.        

Authorized Silver and Sterling Subscribers click ‘Read more…’ (below) to access the balance of the opening discussion. Non-subscribers click the top menu Subscription Echelons & Fees tab to review your options. Authorized Gold and Platinum Subscribers click ‘Read more…’ (below) to also access the Extended Trend Assessment as well.

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Rohr Market Research Tagged analysis, bond, budget, ceiling, comments, confidence, confluence, Congress, Cruz, Deal, debt, Debt Ceiling, Democrat, economic, election, employment, equities, Euro, Europe, FEMA, fixed income, flood, Foreign Exchange, GDP, Gilt, govvies, Harvey, Hurricane, Indicators, inflation, Irma, macro, macro-technical, market, markets, McConnell, miscalculation, mosquito, negotiator, Pelosi, promoter, Republican, rudderless, Ryan, S&P 500, Schumer, storm, surge, T-note, technical, TREND, Trump, US dollar
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