Forget Deficit Reduction …

Everyone learned a lot yesterday.

Things are following the theme we made yesterday morning before the opening.

Trump’s goal to reduce the deficit has been thrown under the bus.

Manipulation out of Washington is out in front of everything.

Tariffs are going to tend to increase inflation.

So, we are watching a stair step move into even more chaos.

Forget growth being energized by fewer regulations. There will be little investment as companies will be sitting on their hands watching the chaos unfold.

The U.S. will continue to downsize its growth potential vs. the rest of the world.

We are heading headlong into an effort in Congress to free up cash through tax cuts thereby reducing government revenue.

This will tend to continue to boost the stock market move. Of course this will increase the deficit more, leading to a scene not unlike yesterday where both stock prices and interest rates will rise together.

That will end in a climatic inflection point where both stocks and interest rates will decline, how long will this take, no one knows. My seat of the pants view basis the S&P 500 is: the current level of 5300 could be considered a macro swing point, pointing to a range of 7300 to 3300, high first, over the next twelve months.