His election gave us the “Trump Bump” which was bizarre, entertaining and wildly profitable for many, but then it seems like we forgot to correct for the data point that Donald Trump is the fucking President of the United States.
That exceedingly amusing assessment appeared on DealBreaker on May 17, which you’ll recall was one of the only days in 2017 that might be fairly characterized as unequivocally bad for stocks:
That decline was of course catalyzed by questions about whether Trump tried to bully James Comey into backing off of the Russia investigation, but the point is that if you kind of step back and think about this logically, the idea of a “Trump bump” was absurd from the beginning.
Because calling it a “Trump bump” means that everyone buying into said bump acknowledged that Trump is President, a reality that in a world where people are rational, should trigger the exact opposite of a “bump” in prices for risk assets.
Well, on Wednesday the world is once again discovering that it might have been a mistake to “forgot to correct for the data point that Donald Trump is the fucking President of the United States.”
As noted earlier, the Nikkei just had its worst day since that very same May decline shown on the S&P in the chart above and now, European stocks are falling across the board:
As for gold, well it just took another leg up to its highest since June 14:
- GOLD FUTURES EXTEND GAINS TO HIGHEST SINCE JUNE 14 ON COMEX
Meanwhile, Trump is back on Twitter bragging about his bigly, “stronger than ever before,” mighty “arsenal” of nukes:
Coming full circle, this is what happens when the world remembers that Donald Trump is President.
Don’t forget to correct for that “minor” data point in your projections…