Donald Trump did his best to juice US stocks to record highs on Monday morning with a couple of soundbites delivered to reporters just prior to leaving for Chicago, a city he’s variously maligned as a “war zone”, among other derisive labels.
Commenting on the “Phase One” trade deal with China on which the market is hanging its proverbial hat, Trump echoed remarks from his advisers in expressing optimism, although he wasn’t very eloquent about it.
“We’re a little bit ahead of schedule, probably a lot ahead of schedule”, he said.
Believe it or not, that was good enough to push US equity futures markedly higher, despite being wholly nebulous and clearly improvised. Trump said he’s expecting a good day for stocks.
You’re reminded that prior to the mid-October rally (catalyzed as it was by the collision of lopsided positioning with two key macro catalysts in movement on Brexit and progress on trade), the S&P had gone nowhere since the post-tax cut euphoria.
That’s not an attempt to throw cold water on recent gains and it’s not an attempt to cast aspersions at Trump. In fact, it’s the opposite – the point is that the trade war and the president’s generalized penchant for controversy have arguably undermined the market-friendly effects of his signature policy achievement.
For what it’s worth, BofA’s Michael Hartnett is still contrarian bullish. His target for the S&P is is 3,333 by March 3rd (“Super Tuesday”). He sees 10-year Treasury yields at 2.2% by February with cyclicals (HY bonds, oil, copper, KOSPI, DAX, NKY, industrials, banks) all outperforming volatility and defensives. His famous Bull & Bear indicator is still sitting near “Buy” territory.
Trump also reiterated on Monday that it’s possible he and Xi would ink the first part of what the administration swears will be a comprehensive deal when the two leaders meet in Chile next month.
Finally, Trump suggested he might release some footage from the raid that killed Abu Bakr al-Baghdadi.