Trump Tussles Markets

In his first press conference as President-elect, Donald Trump’s words shook up the financial markets. Traders and investors witnessed strong gyrations and strong swings in the US equities markets, the US dollar, and safe haven assets like gold.

The initial knee-jerk reactions and exaggerated market moves were perhaps an indication into what lies ahead, and what one can expect as Trump assumes his new role as the 45^th President of the United States. With just eight days to go until inauguration, are we getting our first glimpse of how a Trump presidency might look?

While it is quite refreshing to see that the tone and timbre of Donald Trump’s style of oral communication has not changed as he transitioned from presidential candidate to President, his inability to filter his thoughts raises some serious concerns about potential repercussions from this ‘shoot from the hip’ style of communication.

Can We Get a Handler Over Here?

It is quite evident that Trump’s communication style matured greatly during the final weeks of his presidential campaign. During the last few weeks leading up to the election itself, we witnessed a transformation in which Trump, as a presidential candidate, was able to stay on message.

This newfound style allowed him to deliver succinct, defined, and concise statements to express his beliefs. Most importantly he strayed much less from his primary message, and for the most part, stayed on topic.

It is highly probable that during this period in which he transitioned from a shoot from the hip style to the use of teleprompters and written speeches that to some degree he initiated the use of overseers or handlers to aid him in his delivery of his message. These changes, in all probability, resonated strongly to voters that were undecided or simply unsure of Trump’s ability to lead our country in a manner consistent with the necessary presidential demeanor.

It is also evident that once elected, Trump began to stray from that approach, returning to his original demeanor. Yesterday’s market gyrations and knee-jerk reaction to his statements highly illustrate the power of his words and more importantly, the potential repercussions of a statement.

Gold Breaks 1200 as US Dollar Continues to Fall

While we saw US equities gyrate considerably before stabilizing, we have seen defined trends develop in the US dollar and gold. The US dollar continues to trade under pressure, losing value on a weekly basis for five of the last seven weeks. During that same period of time, we have seen gold prices stabilize, find support, and move to higher ground. Although these trends might change once Trump takes office, there is also the high likelihood that we could witness an increase in momentum of these trends, with a net result of higher gold prices.

We could in fact be witnessing the first signs that the Trump rally based upon a short-term optimism has begun to wane. Although the future is obviously unwritten, the uncertainty that has become so pervasive in market sentiment, continues to grow.

Wishing you as always, good trading,