Don’t Choke On Your TACOsThe market is betting Trump is all bluster and no action. The acronym "Trump Always Chickens Out" (TACO) is sure to piss the President off. Now, if the TACO trade is right, then Trump's threats will lose their power as a negotiating tactic. Therefore, on the assumption Trump believes in protectionism - he may have to follow through on some of his rhetoric. Markets seem to think that won't happen...
Will Common Sense Prevail?For the past few weeks we've watched Trump double down on dumb. There are no winners from tariffs - only losers. Perhaps the biggest loser of all will be the US consumer... forced to pay higher prices for almost all goods. Is that the goal? From Trump's lens - China has been "ripping the US off" for decades. Why does he think this? The President will cite the US' ~$1T trade deficit with the Middle Kingdom... which has doubled in 5 years. But this isn't necessarily a bad thing... here's why
Are We Closer to a Market Bottom?It's very difficult to know if we're at or close to a market bottom. They rarely occur over the space of weeks - it generally takes months. But I cannot predict when (or what) the bottom will be. However, I think the ~20% correction from the market high (6147) to the low (4834) tells me a large portion of the selling is behind us. For example, we're now starting to see equity exposure significantly reduced and cash levels raised. This is a good sign... as there are a lot less people to sell.
