Jan 23, 2017 - Trump as a president (short market update)

Trump as a president

• Sending mixed signals
• Leaning to protectionism
• Tax cuts and stimulus not clear meaning disappointment for the market
• Planning to withdraw from Trans-Pacific Partnership (Japan, Australian…etc., pact of 12 countries in total)
• To renegotiate NAFTA agreement with Canada and Mexico soon

All of that makes me believe that Trump is going to nail down completely the position of US as a global power as the lost trade opportunities will be quickly picked up by China and eventually Europe that still do advocate the free trade globally.

Trump indices - for opportunistic stock investors  link

Oligarch Index (OLGY) includes companies that are seen favorably by Trump: Colony Capital Inc., CoreCivic Inc., Exxon Mobil Corp., Facebook Inc., Ford Motor Co., Goldman Sachs Group Inc., JPMorgan Chase & Co., PayPal Holdings Inc., Sprint Corp., SoftBank Group Corp. and United Technologies Corp

Drain the Swamp Index (SWMP) includes companies that are on the flip side of the coin: Amazon.Com Inc., Boeing Co., General Motors Co., Kellogg Co., Lockheed Martin Corp., Macy’s Inc., New York Times Co., PepsiCo Inc., Rexnord Corp., Tesla Motors Inc., Time Warner Inc., T-Mobile US Inc., Toyota Motor Corp. and Twitter Inc. and Constellation Brands Inc.

What about the 10-year US Treasury yield during the first of of Trump as a president? The yield closed at 2.48% last week, up from 1.88% on election day.

FX SPOT

EURUSD - critical resistance 1.0800/50

USDJPY - support at 112.00 then 111.30

USDJPY – seen downtrend in spot, now at good levels to enter longs for those who believe USDJPY will move higher again (good risk/reward ratio) and targeting 118.00

FX OPTIONS

Last week saw USD gamma buying

USD gamma was still bid this morning

USDJPY – RR still favoring puts/downside but are relatively cheap

Good luck Champs!

Mr Hawk

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