President Trump and Markets

Posted: May 18, 2017 in Uncategorized

 

Yesterday we finally saw the fallout from Trump various mistakes.

While the Russian probe is just another probe, the President Trump pressuring the FBI Director Comey to quit investigating Flynn is much more serious as it is an obstruction of justice offence (impeachable offence) or at least an overstepping in the executive powers.

What now?

Impeachment is long and drawn process – very hard to achieve for real as it require a majority in Congress really hard to achieve. Article 25 of the US Constitution (unfit for Command) is an easier way- but still with the sweeping victory in Congress 2016 it is hard to achieve.

The most likely scenario is that Congress will remain bogged down in infighting until the 2 year midterm election where a pro -Democratic change in Congress could really lead to a impeachment. But that is November 2018.

What can happen now?

The question is now that all Trump policies pro-growth (eg taxation) will be seriously hindered, and that is what really made the market rally in the first place.

President Trump is on the defensive. Scarily what he can do to offset this issue is …attack North Korea (when he attacked Syria there was a bi-partisan cheer).

Markets

The markets took a hit and they should have some support in this area (SP 500 2,360/2,340 and ASX200 5,700/5,600), but the markets will keep on drifting down to at least  SP500 2,200  (ASX200 5,150-5,200)until July-August. Then I will have to reassess.

Our portfolios.

Our portfolio, differently from most, are well prepared for this scenario.

 

 

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