The stock market’s post-election bifurcation sharpened Monday as technology shares extended their worst performance since the start of the bull market on speculation Donald Trump’s trade and immigration policies will translate into lower earnings. Apple Inc., Facebook Inc. and Alphabet Inc. led the S&P 500 Information Technology Index down 1.7 percent for the biggest retreat since September. The group stands out as the only industry that normally benefits from a rising economy not to rally on speculation Trump’s policies will stoke domestic growth.
There is a growing possibility that China will be at the epicentre of President-elect Trump’s first crisis, triggered by concerns over the potential impact of protectionist measures on China’s trade surplus, which currently supports the increasingly fragile financing chains supporting corporate debt that the IMF estimates at around 155% of GDP.
Whether it be rubles, real, or loonies, the “rising dollar” might be back. If there is a difference between its late 2016 version and the one that began the year in continuation of last year, it is that the global sovereign bond market appears to be its primary connective target. Liquidations are liquidations even in bonds. The disorder of the past week might have some Trump fears/excitement as its proximate cause, but the “dollar” is its foundation. We need only look to China for further confirmation.
But behind the public show of unity, a stark difference looms. House Speaker Paul Ryan is a fiscal hawk who wants to couple tax cuts with deep spending cuts. Trump catapulted himself into the presidency talking about tax cuts too, but he also is proposing a multibillion-dollar infrastructure plan and has vowed to protect entitlement programs like Social Security and Medicare. Such gaps went unmentioned when Trump met with Ryan and Senate Majority Leader Mitch McConnell last week. But ultimately, one side will have to bend, whether Trump ends up moderating his spending and tax-cut plans, or congressional fiscal hawks relent on their opposition to new spending.
Today, we find that Edmunds’ “Q3 2016 Used Vehicle Market Report” reveals that many of the same problems also afflict the used auto market. The most startling takeaway from the report is that the percentage of used cars being traded in with negative equity values continues to spike and currently stands at an all-time high 25%. Moreover, the average balance of the negative equity also continues to rise and stood at $3,635 for Q3 2016, up from roughly $2,750 in Q3 2011.
We have witnessed truly astonishing short term market conniptions following the Donald Trump’s election victory. In this post we want to focus on one aspect that seems to be exercising people quite a bit at present, namely the recent surge in inflation expectations reflected in the markets. Will we have to get those WIN buttons out again?
Trump promised an “America First” foreign policy rooted in the national interest, not in nostalgia. The neocons insist that every Cold War and post-Cold War commitment be maintained, in perpetuity….Yet the War Party has not had enough of war, not nearly. They want to confront Vladimir Putin, somewhere, anywhere. They want to send U.S. troops to the eastern Baltic. They want to send weapons to Kiev to fight Russia in Donetsk, Luhansk and Crimea. They want to establish a no-fly zone and shoot down Syrian and Russian planes that violate it, acts of war Congress never authorized
It shouldn’t be this way, but The Federal Reserve “runs” the economy. America is not a free market, but has a group of central planners that manipulates our economic lives. The Fed sets into motion artificial booms and busts by counterfeiting dollar bills and meddling with interest rates. As the wild swings take place, presidents who happen to be in power during the booms pat themselves on the back as geniuses, while those in power during the busts are forced to grin and bear it. Contrary to all the political entertainment found in the mainstream media, it’s is not the president who steers the economy with his “policies”. The president is merely along for the ride that The Fed has put into place.
On 8 November, Prime Minister Narendra Modi gave only four hours’ notice that virtually all the cash in the world’s seventh-largest economy would be effectively worthless…. Mr Modi’s “shock and awe” declaration meant that 1,000 and 500 rupee notes would no longer be valid. These may be the largest denomination Indian notes but they are not high value by international standards – 1,000 rupees is only £12. But together the two notes represent 86% of the currency in circulation..
The Miami-Dade County condo market is coming under severe stress, and turmoil is spreading. There are two aspects: supply and sales activity overall, and the more obscure but highly indicative “preconstruction market.”………Market gurus are eagerly proclaiming that this time, the condo cycle is different because preconstruction condos are sold with a “50% deposit.” But this isn’t a 50% deposit. It’s a series of five 10% progress payments due at at the time of reservation, at contract, at groundbreaking, at concrete-pour at the 15th floor, and at Top Off. They typically spread over 24 months.When a buyer defaults on a progress payment in this market, with little possibility of selling the unit, everyone from the lenders to the developers is bending over backwards to accommodate the nonpayment. Also, alternative lenders have sprung up with loans for the defaulted progress payments. The actual number of defaults is a secret closely guarded by developers (though their lenders know).