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2017/05/04 Commentary: ‘Trump-On’ – ‘Trump-Off’

May 4, 2017 Rohr-Blog Leave a comment

2017/05/04 Commentary: ‘Trump-On’ – ‘Trump-Off’

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

Extended Trend Assessments reserved for Gold and Platinum Subscribers

Commentary: Thursday, May 4, 2017

‘Trump-On’ – ‘Trump-Off’

Major market decisions out of last week into this week seem stalled by the looming next round of House of Representatives votes on the Trump administration’s American Health Care Act (AHCA), the now fraught repeal and replacement for Obamacare. The fate of this legislation is a key indication for two key market factors flowing from Washington DC. The first is whether the Trump administration’s success in enacting various measures in its first 100 days (see both last Wednesday’s Commentary: First 100 Days and Tuesday’s First 100 Days Redux posts on that) can also overcome the lack of any major legislation success on a purely psychological level of Republican Party House of Representatives leadership. That will secondly also be critical for even more important legislation which will quickly follow the healthcare effort.

As noted previous, the problem is the Republicans are predictably getting no assistance at all from Democrats with replacing the flawed previous health insurance program. And the diverse demands of conservative and moderate factions within the Republican Party had also prevented them from passing the bill on their own last month.

Therefore, the bottom line on so many stalled markets appearing to be the proverbial ‘deer caught in the headlights’ is directly related to whether Trump administration reforms look likely to succeed or significantly vexed on the current ‘Trump trade’. It is a ‘Trump-On’ - ‘Trump-Off’ market into the next vote on the Trump administration’s American Health Care Act (AHCA) scheduled for today… or if the votes to pass it are not confirmed, maybe Friday. Of course that is a pseudonym for the more familiar alternating ‘risk-on’ and ‘risk-off’ psychologies that regularly affect market psychology. Yet these rapid reversals on the potential success of the AHCA vote have left the markets stuck instead of inspired.

That is in part due to the contingencies noted in several posts last month on the AHCA being a necessary precursor to getting the more important tax reform right. While the administration might deny that, we feel (along with other observers) that without a clear fiscal bottom line on government health insurance costs it will be very hard to present a definitive tax reform program. So a lot of market psychology is riding on the AHCA vote.

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 2007, 2007 redux, analysis, bond, Caucus, comments, confluence, Congress, Conservative, currency, debate, Democrat, economic, election, employment, equities, Euro, Europe, exports, fixed income, Foreign Exchange, Freedom, Freedom Caucus, FTSE, GDP, Gilt, govvies, healthcare, hope, hopes, Indicators, inflation, interest, interest rate, Legislative, macro, macro-technical, market, markets, moderate, process, redux, reform, Republican, risk-off, risk-on, Ryan, S&P 500, split, structural, structural reform, T-note, tax, tax reform, technical, Trade, TREND, Trump, Trump-off, Trump-on, US dollar

2017/05/02 Commentary: First 100 Days Redux

May 2, 2017 Rohr-Blog Leave a comment

2017/05/02 Commentary: First 100 Days Redux

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

Extended Trend Assessments reserved for Gold and Platinum Subscribers

Commentary: Tuesday, May 2, 2017

First 100 Days Redux

After last Wednesday’s Commentary: First 100 Days post the analysis of just what Donald Trump had accomplished in the 100 days since his inauguration naturally continued to be the focus of quite a bit of various news organizations’ analysis. Yet other than the occasional informed view from a history professor, it was roundly biased across most of the media sources. Those on the Left of course went out of their way to discuss how he had been a failure compared to previous modern US Presidents. While our regular readers know how much we respect the Financial Times, an opinion writer had a major lead article in FTWeekend on 100 days in the court of King Donald  that was very negative and had some key inaccuracies. Anyone interested in what Trump has accomplished and the record of his two immediate predecessors should read last Wednesday’s post.

Beyond relatively subjective personal jibes and specific program criticisms, the FT article went on to cite political advisor David Gergen on Trump’s shortcomings. As Gergen is a consummate Washington DC insider, his criticism of Trump is highly slanted. He asserts that “…compared with Obama and Bush… …Trump has had the ‘worst opening 100 days’ of any contemporary president”, going on to note that Roosevelt is the ‘gold standard’.

No kidding. As we clearly explained the reasons for that gap with Roosevelt for all subsequent Presidents in last Wednesday’s post, we suggest a read for anyone who has not done so. Yet he is also wrong that Trump’s accomplishments fare poorly compared to his two immediate predecessors. Outside of the major stimulus package that was handed to Barack Obama upon his inauguration (see last Wednesday’s post on the reason for the timing), Trump had actually signed many more ‘laws’ (which we will revisit below.)  

Yet the Right is also not blameless in the highly opinionated assessments, including quite a bit of sycophantic gushing over the Trump accomplishments in spite of the healthcare reform legislation failure. And the President himself has been typically bombastic, stating that he has accomplished more than anyone else in history in his first 100 days.(??!) Perhaps he’s never heard of Franklin Roosevelt? It’s equally disconcerting.

Authorized Subscribers click ‘Read more…’ (below) to access the balance of the discussion. Non-subscribers click the top menu Subscription Echelons & Fees tab to review your options. As this is a concise ‘macro’ assessment and Market Observations are much the same as last Tuesday morning’s update in the lower section of last Monday’s ‘HUUUGE! Redux’ post, there is no Extended Trend Assessment in this post.

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Rohr Market Research Tagged 100, 2007, 2007 redux, Bush, Clinton, comments, Congress, days, Democrat, economic, election, employment, executive, executive order, first, first 100 days, healthcare, HUUUGE, macro, media, Obama, Order, redux, reform, Republican, risk-off, risk-on, rollback, Roosevelt, stimulus, tax, Trump

2017/04/28 Commentary: Draghi, Dollar, Diametric (Again)

April 28, 2017 Rohr-Blog Leave a comment

2017/04/28 Commentary: Draghi, Dollar, Diametric (Again)

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

Extended Trend Assessments reserved for Gold and Platinum Subscribers

Commentary: Friday, April 28, 2017

Draghi, Dollar, Diametric (Again)

A very interesting thing happened at the European Central Bank (ECB) press conference Thursday: there were not any questions from the press on whether this month’s cut in the size of the ECB’s asset purchase program (its form of Quantitative Easing) was the beginning of a ‘taper’. It might seem to the uninformed observer that reducing the monthly securities purchase from €80 billion to a mere €60 billion does indeed represent a ‘taper’. Yet (as the single quote marks emphasis indicates) this is also a financial market central banking term of the recent era referring to the initial phase of a central bank terminating its major Quantitative Easing program. As such, it carries a connotation of the move to end that program, not just a reversible reduction in asset purchases if conditions warrant. Yet the latter is just what Signore Draghi has emphatically noted for months is the case for the current ECB QE reduction, as is also clearly stated in the ECB’s monetary policy statements.

Don’t take our word for it. Just go to Thursday’s ECB press conference opening statement (with links to the full press Q&A and video.) Previous ECB press conference transcripts can also be accessed, and all previous ECB press conference webcasts are also accessible at http://bit.ly/2pnguV7. And in general, it was fairly upbeat affair, even with the usual Draghi criticism of the lack of more aggressive structural reform which would reinforce the central bank’s accommodative monetary policy.

And he was very equanimical on some other topics, such as queries on how the ECB might be planning for political changes in Europe or the potential for shifts based on the programs proposed by the new US administration. His literal answer in one instance, and implied answer throughout, was the governing council discusses ‘policy’ not ‘politics’. Well said. Within that he allowed that structural reform is harder to pursue into the election cycle for obvious reasons, and that any major US reform success would need to be revisited once it is actually policy.

This is where we jump into discussing the US dollar, which has had split fortunes against developed economy and emerging currencies of late, with good reason.

Authorized Subscribers click ‘Read more…’ (below) to access the balance of the discussion. Non-subscribers click the top menu Subscription Echelons & Fees tab to review your options. As this is a concise ‘macro’ assessment and the Market Observations are much the same as Tuesday morning’s update in the lower section of Monday’s ‘HUUUGE! Redux’ post, there is no Extended Trend Assessment in this post.

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Rohr Market Research Tagged capital, comments, conference, confluence, corporate, corporate profits, currencies, currency, Deflation, Disinflation, dollar, Draghi, ECB, economic, Emerging, emerging currencies, employment, Euro, Europe, exports, Fed, fixed income, FOMC, Foreign Exchange, GDP, Germany, Indicators, inflation, instability, investment, inward, inward investment, macro, normalize, offshoring, press, press conference, profits, QE, reform. tax reform. Repatriation, S&P 500, tax, territorial, Trade, TREND, US, US dollar

2017/04/26 Commentary: First 100 Days

April 26, 2017 Rohr-Blog Leave a comment

2017/04/26 Commentary: First 100 Days

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

Extended Trend Assessments reserved for Gold and Platinum Subscribers

Commentary: Wednesday, April 26, 2017

First 100 Days

We can be fairly certain that any of our liberal Democratic readers are aghast at the very thought of the opening graphic of this post. Yet it is not just Donald Trump who is being held to the standard that was set by the aggressive actions of President Franklin Delano Roosevelt during the opening phase of his first term in 1933. As has been true for every President since Roosevelt who has been measured by that standard (which did not exist until the first Roosevelt administration), it is a significantly unfair comparison by any measure. The first of which is the nature of the crisis at the beginning of Roosevelt’s first of four terms, and secondly the composition of the US Congress which he had to support the implementation of his plans.

This is important due to much being made of what President Trump has accomplished in his first 100 days by this Saturday. Given how highly litigious US society has become, it is important to keep in mind that some of Roosevelt’s ultimately successful actions were even deemed illegal after the fact. The implementation of those might have easily been blocked (or at least delayed) by injunctions or other preemptory legal processes today.

This is not to take anything away from the Brobdingnagian challenge Roosevelt faced in lifting the US economy out of the Great Depression. Ultimately both the US and global economy were much better for it. Yet he had certain advantages in the sheer complexion of the Congress which aided and abetted his agenda. Neither John F. Kennedy nor Ronald Reagan nor Barack Obama and not even Donald Trump enjoyed the legislative leverage which was afforded the first Roosevelt administration. The sort of unified Democratic Party control of the 73rd Congress of the United States was a key element of his success.

The very successful Reagan administration began with many fewer Republican House and Senate seats (more below), and even Barack Obama only came close to Roosevelt’s Senate percentage (of a 100 member Senate versus 96 during Roosevelt’s tenure) with far fewer seats in the House. Roosevelt’s overwhelming 1932 election victory was of course driven by a nation desperate to recover from the Great Depression, and happy to give the new leader an almost dictatorial advantage in Congress. And some consideration of that First 100 Days metric is therefore in order.

Authorized Silver and Sterling Subscribers click ‘Read more…’ (below) to access the balance of the discussion. Non-subscribers click the top menu Subscription Echelons & Fees tab to review your options. As this is a concise ‘macro’ assessment and the Market Observations are much the same as Tuesday morning’s update in the lower section of Monday’s ‘HUUUGE! Redux’ post, there is no Extended Trend Assessment in this post.

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Rohr Market Research Tagged 100, 2007, 2007 redux, Clinton, comments, Congress, days, Democrat, economic, election, employment, executive, executive order, first, first 100 days, Gorsuch, healthcare, HUUUGE, Johnson, Kennedy, legal, macro, Obama, Order, Reagan, redux, reform, Republican, risk-off, risk-on, rollback, Roosevelt, SCOTUS, stimulus, TARP, tax, Trump

2017/04/24 Commentary: HUUUGE! Redux

April 24, 2017 Rohr-Blog Leave a comment

2017/04/24 Commentary: HUUUGE! Redux

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

Extended Trend Assessments reserved for Gold and Platinum Subscribers

Commentary: Monday, April 24, 2017

HUUUGE! Redux

The reaction of the equities and other asset classes clearly illustrate the degree to which the first round of the French Presidential election was a stressor for the markets. All of the fears that a populist wave across the world previously indicated by the UK Brexit LEAVE decision and US electing Donald Trump as President would sweep away both the European Union and the euro currency are now reversed. While potential for the center to hold was foreshadowed in the recent Dutch election defeat for far Right candidate Geert Wilders, there was still quite a bit of concern about the French election. That is because on the opposite pole of the political spectrum from the far Right Nation Front’s Marine Le Pen was the surprising strength far Left candidate Jean-Luc Mélenchon.

He is in fact very far Left, an admirer of Hugo Chavez and Chinese chairman Mao Zedong. And consistent with some of concerns attendant to Ms. Le Pen’s more extreme positions, Mélenchon is for nationalization of major corporations, a referendum on European Union membership (i.e. a possible ‘Frexit’ vote) and a top income tax bracket of 100% on high earning French citizens. In other words, two of four candidates had extreme positions.

Yet as he was not one of the two top polling candidates on Sunday, he is now out of the picture with little chance his far Left supporters will swing around to voting for Ms. Le Pen. That leaves her running against centrist first-time political candidate Emmanuel Macron. The received wisdom may be a bit scary after recent election and referendum surprises, yet strongly suggests a significant Macron victory over Le Pen in two weeks.

That is due to the degree to which the majority of French voters who are against France leaving the euro currency and reverting to protectionist policies are likely to take a chance on Mr. Macron. And so the ‘relief rally’ in equities previously concerned about a ‘Sunday surprise’ is quite strong this morning. That is also true for a euro that was depressed due to the risks, and weakness of govvies buoyed by the uncertainty into this weekend.

Fair enough. Yet that is now priced into the markets as they revert to focusing on other concerns for the global economy centered on the US Congress’ return from their two week Easter break. That is accompanied by recent noises from the Trump administration on a Republican Party compromise on previously vexing aspects of the key healthcare reform that failed on its first go round. And there are other major issues 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 2007, 2007 redux, analysis, bond, Border, Border Wall, Brexit, budget, comments, confluence, Congress, currency, deadline, Debt Ceiling, Democrat, economic, election, employment, equities, Euro, Europe, fixed income, Foreign Exchange, French, FTSE, GDP, Gilt, govvies, HUUUGE, IMF, Indicators, inflation, Korea, Labour, Le Pen, macro, macro-technical, Macron, market, markets, May, Mélenchon, Mexico, redux, Republican, risk-off, risk-on, S&P 500, T-note, technical, Trade, TREND, Trump, UK, US dollar, Wall
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