I was stunned to see this comment. Why? After seven full months of the Trump presidency it is stunning that anyone in the media or punditry at large would believe that anyone around the president could change the direction or ability of his administration to get anything done. Gary Cohn, Wall Street maven and head of the Council of Economic Advisors, is no exception. Donald Trump was the chaos candidate and he is the chaos president. He marches to his own drummer.
Importantly, I am certain the Street and the markets picked up on this early on. I wrote about it back in May (How White House walloped by scandal may change odds for Wall Street and your retirement).
The Trump Trade
For those who still believe that the Trump Trade and realization of the Trump agenda is the key factor behind the market’s recent success, I beg to differ. The Trump Trade, I believe, is (has been and will be) a dead issue until Donald Trump changes (which I don’t see as a realistic possibility), the drip, drip of the investigation leakage ends or Mr. Trump leaves office. These distractions make it very hard for any real progress on tax reform or infrastructure. As such, most players (except the sellers last Wednesday) figured this out months ago. My bottom line is that the market’s resilience is more about improving corporate earnings, global synchronized economic improvement, and the one thing Trump could effect, regulation … all of this with a backdrop of low inflation and interest rates. It appears that most of the on-air personnel and pundits appearing on CNBC have not picked up on this concept yet. (kortsession.com –May 22, 2017))
What is also interesting here is that the so-called expert quoted in my title is Jeffrey Sonnenfeld, a tenured professor (Management) in the Yale School of Business (“A Gary Cohn resignation would ‘crash the market,’ management guru Jeffrey Sonnefeld says”). He is not a portfolio manager, market strategist or analyst. Ergo, he is even more unqualified than CNBC’s average pundit to prognosticate about the market.
Bottom Line (s): The Trump agenda was dead on arrival January 17, 2017 all because Trump, who many believed and hoped would change, did not and will not change. Our economy is strong (except for the deregulation piece, none of the rest is to the president’s credit) … not too hot, not too cold, with low inflation and low interest rates. Meanwhile, the rest of the world is on the road to recovery after 8 years of sub-par performance, which cannot help but benefit us. Finally, corrections are normal. Use this one to your advantage.
What’s your take?
P.S. Art Cashin, Director of floor operations for UBS, suggested late in the trading day it wasn’t just a potential defection by Cohn that had the market worried but the possibility that many of the so-called smart people surrounding the president might follow suit. Then where would we be? I propose we’d be in exactly the same place we are today. Trump does not listen. Ex Steve Bannon they all seem to be impotent. On the plus side the Congress and courts will still provide the president with a check.
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