It is almost ironic that
but, I think the question is real and is driving the markets.
The S&P 500 in 2017 and How Correlated It Has Been to Which Trump Shows Up
I was a little surprised how well this chart seems to tie out to my perception of what has gone on with Trump this year.
The market had some Inauguration Jitters coming into the inauguration as there was a high degree of uncertainty of how POTUS would act or behave.
He spurred the market with a Busy 1st Week starting with some Executive orders on shortly after inauguration and culminating with orders to allow the Keystone pipeline to proceed.
That rally was undone by the Immigration Executive Order that came out late Friday – undoing much of the ‘Presidential’ behavior of the first week.
We went through a period of calm, a brief, small pop (that I couldn’t find attribute to Trump) and then another period of little to nothing going on.
Then he was In D.C. and Tax Focused amongst other policy initiatives where he seemed to tone down the rhetoric that had concerned the market while focusing on the things that the market liked – lower taxes and less regulation. I think the meeting with Abe from Japan occurred during this period as well.
Then we held steady as the market had some State of the Union Jitters, which the impromptu press conference did little to contain.
Without a doubt he then delivered what was viewed as a very successful and Conciliatory State of the Union address. Both sides of the aisle cheered parts and the markets did well.
Then he seemed to focus on Russia & Wiretapping in a Tweetstorm that has left many shaking their head and wondering what happened to the Donald Trump that had stood up on Tuesday and so clearly led the nation.
Yes there is the Fed, French Elections, Greece, OPEC and dozens of other stories driving the market – but for the next few weeks, what seems to matter most is Which Donald Trump Shows Up?
What Donald Trump Do We Get Next?
The market remains priced for the former and seems more than willing to give the benefit of the doubt and so long as the Fed or any of the other dozens of factors does nothing to derail things, markets should remain calm. But if the latter Trump starts to dominate, the market’s patience may not last, especially if one of the other factors triggers some risk aversion.