The first market move of Trump's second Presidency was: the weakness of the US dollar.
It was a sharp move on a report – later confirmed – that Trump will not initiate any taxes to begin his term. The main lesson in that – and I think we've learned this before – is that Trump's bark is worse than his bite. There were fears that he would be a more invisible version of Trump but so far he looks like the same guy.
So here's what we've learned.
1) Noting to disturb the stock market
Our baseline playbook for Trump is the same as the first time: The stock market is priority #1, along with growth. Efforts to balance trade and the deficit are second and third.
A tariff war is a serious threat to equality and as long as countries can threaten retaliation, tariffs may not be fully implemented. Stanley Druckenmiller today said thinking The US could get away with a 10% across-the-board tariff. I'm not so sure but it will depend on how other world leaders respond.
2) Tech is on the rise
The front row of Trump's inauguration featured no powerful lawmakers or allies. It featured his family and the titans of high-tech, including Zuckerberg, Bezos, Pichai and (of course) Musk. Tim Cook was sitting earlier in the church with Zuckerberg and Bezos.
It is a sign that tech will hold almost unrestricted power in the administration, as long as they maintain their ideological line. That should bode well for profits but Cook will be a key figure to watch. Apple is trying to move some manufacturing out of China but that is a very difficult task because of Chinese knowledge and supply chains.
3) Energy is a top priority
The Trump administration released a document today outlining its priorities and energy was high on the list, heading one of the four sectors. This is something that Trump has been saying since it was selected and is aligned with the goals of AI and independence. One of the lines from the priority list was:
Trump will declare an energy crisis and use all necessary resources to build critical infrastructure
That's a business topic that's not new but I still believe it's early and I believe it's going well for everyone involved in any kind of energy. whether foreign or domestic.
4) Immigration is not moving as hard as feared
The administration document says “President Trump will take bold steps to secure our border” and that will include sending troops and deporting 'criminals'. There is nothing here about big moves and that is in line with the idea that Trump does not want to disrupt the economy. The bottom line is that an underclass of illegal, low-wage workers is good for business.
5) Uncertainty in crypto, open season on fraud
The launch of $TRUMP and $MELANIA is a low point for the President and for crypto in general, including Robinhood's decision to list the President's grift. It's starting to look like it's going to be open season on financial fraud, which is a sad development for anyone who believes in capital markets. I am afraid of the signals it sends especially to young people who want to work hard and invest. I'm not sure that's the path to wealth in this economy.
