It won’t be long now.
The market will of course parse the inauguration speech for any clues about the timing and scope of fiscal stimulus and/or tax cuts. Traders will also be anxious to hear any details about whether the new President will be open to implementing the GOP’s border tax proposal (which Trump has called “too complicated”) – as a reminder that has implications for all kind of things, including the dollar and crude (think WTI-Brent spreads).
In reality though, we’ll likely get “good guy, presidential Trump,” not “bad guy, provocateur Tump”- unless he just decides mid-speech to say f*ck it and wing it (which would at least add an element of humor to an otherwise deeply disturbing spectacle).
At most, we might get a hint here or there about global trade – otherwise I doubt they’ll be much for traders to latch on to.
Speaking of traders, below, find Richard Breslow’s take on Friday’s festivities.
Via Bloomberg’s Richard Breslow
When Donald Trump gave his sole press conference, it was awaited like few other events of its type. Domestically and globally. We thought we would have all kinds of questions answered. That we would finally “get to know” the man and his policies. Notwithstanding 18 months of speeches and debates. It didn’t quite work out that way. And we’ve spent the last 10 days since just as confused as before.
- Today, we will hear his inauguration speech. And no one is talking about anything else. I suspect that he will sound presidential, say a lot of right things. Be more the Donald Trump of election night than the other one. And sometime next week we’ll still not really know what we’re in for. And his favorable/unfavorable ratings will be very much the same
- Markets will be shy about a knee-jerk buy-the-rumor, sell- the-fact reaction. But those so inclined will be just as watchful and eager for the right time to do it
- Inauguration speeches are big events. They are historical moments, often referred back to long after. And, if done well, are momentum builders for the first hundred days, even the first term. It’s unclear who wrote the speech, but you can be sure it’s been well vetted. And he’s unlikely not to be well aware of the moment
- But more than any other of its kind that I can think of, it will have to be judged by what communications come later. Not to mention, what actually gets done and how. It’s unlikely, at least at first blush, to be the definitive statement everyone’s hoping for, on where he will take the nation. And while we know he’s a master of provocation, we’ve no idea, when it really matters, what his reaction function will be to being provoked
- And it would be good to remember, especially when trying to trade the event, that very few things in today’s world are zero-sum. It’s gone out of vogue to talk about multiplier effects, but every policy affecting trade or global capital allocation has a magnified affect elsewhere. It’s not at all as simple as saying this is what it does for me