Donald Trump has been very busy since his victory in the US Presidential Election early November.
But his Monday address, which followed his inauguration and his unscripted remarks that accompanied his signing of executive orders was a declaration of intent.
He has a clear vision of where he would like to take the US.
It’s not so much a ‘leader of free world’ as it is a concerted effort to make Trump’s America ‘Numero uno’ by boosting its exceptionalism, withdrawing from the international bodies, increasing its wealth, while destroying its neighbors, and eventually flying to Mars.
President Trump announced that the United States would be withdrawing from the World Health Organisation and, more importantly, the Paris Climate Accords.
The second will annoy a lot of people.
It is in line with the long-standing promise of Mr Trump to lift the offshore oil and gas lease bans and encourage US energy producers: “Drill, baby, Drill!”
If the US wants to compete with China as the most heavily subsidized manufacturer, and exporter in the world, and thereby reduce the US’s current trade deficit with China then encouraging “Made in the USA” by driving down energy costs is a strategy worth trying.
It’s not clear how effective it will be. If you increase the supply and drive down prices, oil and gas production will eventually become uneconomic.
Even before the announcement, oil prices were already falling.
Crude is doing what it wants, a correction to the downside following a six week rally which saw WTI front-month gain 19%.
Crypto bros around the world were disappointed.
President Trump did not mention anything about crypto deregulation or a US crypto reserve.
Bitcoin reached a record high in anticipation of a positive announcement and after the controversial release of the $TRUMP token on Friday night.
But traders rushed Monday evening to bail out their speculative son.
Despite this, Bitcoin still held above $100,000 and the market is still looking forward to President Trump’s crypto-friendly appointments in the Treasury and Securities and Exchange Commission.
Aside from that, the US Dollar first fell and then rallied. The sell-off was a reaction to Trump’s initial dismissal that tariffs were not a “Day One” issue.
Then it bounced a bit back after he proposed 25% of tariffs on Canadians and Mexicans exports to the US starting 1st Febraury.
At first, the only comment made regarding tariffs and China was about a possible deal reached over TikTok.
On Tuesday evening, Trump stated that he was considering a 10% tariff for Chinese imports beginning next month.
Despite this, US stocks have continued to rise, helped by a decline in bond yields. Plus can change.
The S&P 500 has now moved within 0.5% of the all-time high.
The President’s unrestrained and unstructured way of communicating his ideas and decisions is something traders can expect to see again.
He also has the habit of picking people apart until they do as he wishes. This could put a lot of pressure on Federal Reserve to lower rates even further.
Musk is by his side so there’s a good chance we’ll be the first to hear about it.
David Morrison is Senior Market Analyst for Trade Nation. His views are his own. )
This post Look Who’s Back may be updated as new information becomes available.
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