The Big Economic Risks come in the Last Half of the Year…

Chaos reigns as we pass through the first 100 Days of Trumpism. That is a concern and has been a factor for any investor as they try to adjust portfolios. The bigger immediate and long-term risk is to the health of the populace. Defunding health care and its research capabilities are core problems for the country.

The economic story has cross-currents which will probably push back the Big Risks to later in the year.

Those cross currents are:

1. The big speculative money in the markets includes hedge funds and Sovereign wealth funds like Saudi Arabian interests, They are all friends of Trump, and believe that Tax Cuts, Tariffs, and De-Regulation will make the economy work. They will be buyers during this chaotic period.
2. Consequently, big money buying will prevail for a while as many of the big guys believe that once employment drops significantly and lower economic activity puts a damper on inflation numbers the FED because of its dual mandate on employment and inflation will be forced to lower interest rates. Lower rates are then expected to bring in speculative stock market buying.
3. So, the pressure will be focused on the people and Trump’s direction will continue to be to move money to the top.
4. That brings up the BIG RISK, that the finely tuned economy that the US has relied on will not respond to Trump efforts and corporate earnings will be destroyed by increasing inventories and slow sales as the world turns its back on the US. That Risk will be something to watch for in the last half of the year. And US Government Deficits will rise, not decline as projected by MAGA interests.
5. At the moment we are in the declining Chaotic phase of the Trump 100 Day stock market with the March 13 trading bottom price level in danger of being taken out, and new lows developing before the Big Money can get control.