Market Briefing For Tuesday, January 24

The 'dawn of a new Ice Age' summarizes how some European press assessed the cold-hard-hearted tone they deduced from President Trump's Inaugural speech. That perspective, like most U.S. media takes included, probably goes too far in criticism; while there is no doubt compassion wasn't at the crux of his Address. It was 'serviceable' and that's about it.

To me it was not the 'Declaration of War' some suggest (European press in particular), as much as an affirmation of reset. However the speech was not internationally outreaching, tending more toward protectionist or isolationist in tone, and of course that's dominated the media discussions. But perhaps more than was logical, though that's how it came over. Plus since Friday, a number of moves were taken to affirm 'change', and while very little of it has proved endearing to many, the clarifications are rather evident, including of course the first White House Press Conference held Monday (Day 1).

Ignored going forward (as this is now mostly political noise among media at the same time real moves do merit discussion; such as a suspected coming bilateral trade deal with Great Britain when PM May visits next week). Risks to the market may come less from the stark reality return of 'realpolitik' as a audios to socialistic trends in the United States seems a focus, or even the dressing-down (such as Kelly Ann on Meet the Press reminding Chuck Todd of a reporter's 'place' which isn't to give opinions as she put it).

What matters may be a sobering realization we'd talked about differentiating not only between proposals, enactment and implementation, but very lofty market price levels ahead of value prospects. That may adjust over time. It's the idea of nearly epic levels of bubbles being constructed in various areas; including equities, not simply a bubble in optimism which we called for in the wake of a Trump win.
 

Bottom-line:

What we're facing is a 'race' to either create GDP growth and corporate profitability, versus recognizing the artificial nature of a lot of this economy. That can change if things happen swiftly enough, which I suspect is why there are arguments about 'when' serious market risk might present itself. Short-term corrective winds were repelled and should be again as so many who have positioned themselves for disaster find it's not happening. I do expect a February dip as we've previously discussed but not something as draconian as some persist in calling for.