The Trump “Twitter Effect” On Oil Prices

With 10-year paper approaching and a 70-year high in the yield curve, the availability of credit for all manner of business becomes another issue.

America’s Economic “Checkup”

The genuine enhancement of tax relief and expenditure has to be translated into the fundamental standard by which American economic health is measured – consumer demand.

However, as uncertainty increases, demand remains a concern.

This is especially in light of increasing consumer prices following the moves in solar panel, steel, and aluminum tariffs.

Even if successful, these will dictate the use of higher cost U.S. metals in the production of finished products.

Then the reprisals from other countries will impact U.S. exports

China announced the initial rollout in tariff against 128 U.S. products yesterday that is going to hit certain sectors, particularly among U.S. agricultural exports, on the chin.

However, the genuine global response is yet to come.

Now, the truly unsettling aspect is this…

In aggregate economic terms, the tariff decisions are moving toward undercutting the advantages of the tax cut.

Meanwhile, Presidential personal vendettas against CEO’s like Bezos guarantee further destruction of market cap for far more companies than just Amazon.

Again, these are not problems arising from the market.

They are exogenous to it.

With each new wave, further value is eroded, and levels of angst increase.

It’s the market perception that drives what investors do.

When uncertainty increases, so does the excessive swings we have experienced lately in index performance.

At a fundamental level, oil prices reflect such perceptions.

An economy in which consumer demand, sustainable employment levels, and reasonable expectations of selling American production abroad are all becoming problematic will provide sufficient rationale to temper oil prices.

Once again, it is uncertainty that drives this train.

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