E Market Briefing For Monday, December 19

Personally I believe Trump will go for the 'full package' right away if he's well aware of the greater difficulty that would occur doing it incrementally; plus a realization that only the 'first tranche' of reforms is likely retroactive to Jan. 1 of 2017. So we'd encourage going forward with maximum effort initially.

2) Speculation abounds that President Trump will not 'tear-up' the Iran deal on day one; and instead propose a more serious dialogue with that rogue sort of state. I suspect there's something else afoot, and the market might reel a bit, unless it embraces the significance. 

That could relate to a rumor that Trump WILL at least threaten to reverse the deal; but ONLY if we get total support from other major powers that had signed-onto the Iran deal. To wit: it would be necessary for everyone to tell Iran that any violations will result in unanimous re-imposition of sanctions.  

There is another more ominous proposal said to be 'floated' by one of DJT's National Security team. That would be an ultimatum to Iran to abandon all of its nuclear programs amidst a revelation of secret aspects of the Kerry/Iran deal that aren't publicly known. And if not, again; all the sanctions come to play. My take on that is it's too Draconian, will be stonewalled by Iran, and it wouldn't play with Moscow, at least in initial draft versions possibly around. 

3) Speaking of Russia; there is far more involved with President-Elect Trump and Putin than the superficial discussions appearing in the media or critique of embracing a thug and so on. My suspicion is that Trump, once again, is and will be negotiating with Russia; not rewarding aggression in the direct way. There can, however, be no doubt that Russian intervention did bring the turnabout in Syria; and though lamenting the civilian losses, we don't hear too much grumbling about the loss of the 'rebels' or Islamists; and that may be because the West (in the past year) really didn't know who they were, or who they were ultimately showing affiliation to. 

I dismiss (for now) the idea of cozying up to Moscow without Putin's serious cooperation on the Middle East; and clear understanding of limits as far as incursion and disruption in Eastern Europe. Putin's cyber-gangs are also said to be trying to stir-up German politics (and he now dislikes his old friend Merkel who is running for re-election again; remember they were both friends when he was KGB in East Germany); along with propaganda in Poland, Estonia and Lithuania; and they moved ballistic missiles into their enclave wedged-in between them. A de-escalation must occur.

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Gene Inger 2 years ago Author's comment

Well said and 'close' to what I've said to our www.ingerletter.com 'actual' subscribers for several weeks. I wouldn't worry about 'Trade'; just avoid 'linear thinking' and recognize that China and Mexico realize things have to be renegotiated. As to the market; before the Vote I projected an extreme rally if Trump won; opposite of most forecasts. And now I have another view as we move into the new tax year. I appreciate your interest in my work; and reflections. (The comments here are usually required to be a day or two after shared with our subscribers and do not include my technical chart video analysis... I do appreciate the interest... happy holidays!)

Moon Kil Woong 2 years ago Contributor's comment

The market hopes for growth. It is too soon to expect it besides the growth from Obamas policies. In reality global trade wars have so frightened people there is like a last hurrah mass buying these last months for those trying to get what they can before something disrupts it. Buying before a storm is good for a economy only so much as no storm arises. Those buying seem to differ that all will be peaceful.

A China trade wart would in itself be a mass shock to the market and prices. However, it will cause faster growth of even more price competitive players unless the US decides to block it all which will crash the economy. If you want negative growth that would be a great way to do it. If you want America to stop being a super power that would be a great start. If you want a horrid economy imagine an America with no trading partners besides Canada.