From “Promise” To “Payback” – Here Are The Five Stages of The “Trump Trade”

As Deutsche Bank’s Alan Ruskin puts it, without getting too cute about it, “there are probably five defining stages for the ‘Trump trade’: Trading i) ‘the promise’; ii) the deal-making; iii) the enactment; iv) the economic impact, and, v) the payback.“
Here are the details as market pscyhology shifts from phase 1 to stage 2, which DB says took place during last week’s Trump press conference, and what markets can expect going forward.
The five stages of the Trump trade
Trump’s press conference last Wednesday has probably drawn the line between ‘the promise’ phase, and, the stage where deliverables will become progressively more important. The ‘promise’ stage was never seen extending beyond Trump’s inauguration, since it was always expected that the market would start responding to actual President/Congress initiatives in what is likely to be a very active first 100-day agenda.
To get to the enactment stage it is usually important for the President to use political capital wisely, not least because 9 of the last 12 Presidents saw their popularity near peak and leak within months of their inauguration, making it progressively more difficult to get things done. However, in current circumstances, much of the impetus and detail on fiscal reforms, including ‘market hot buttons’ like the border tax adjustment, already have considerable Congressional impetus, not least from the Ryan – Brady tax plan.

This post was published at Zero Hedge on Jan 16, 2017.