Tuesday, December 6, 2016

'Day One' Inflation, 'Day One' Slowdown: Trump Is Not Backing Down

*Inflation is going to jump "day one" of the presidency.

*Many thought the president would flip or back off from his strong stance. Based on recent tweets and news he will not.

*35% taxes, 45% tariffs, and maybe newer strategies are about to hit the economy. However they get flowed, they initially either spark inflation or sap profits.

*This is not a positive fundamental market setup.

We recently showed that many of President-elect Donald Trump's trade policies are "day one" events. These policies will immediately add to inflation and immediately slow the economy. Many thought President-elect Trump would back down. We wrote we did not. He has proven of late that he is driven and very intent to carry out his plans.
Tariffs and taxes add expense that either gets passed through or eaten. Tariffs on other countries and broken deals, at least initially, will slow trade and so the economy. This is an imminent stock market (NYSEARCA:SPY) risk.
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