Submitted by Lance Roberts via RealInvestmentAdvice.com,
Over the past couple of weeks, the market has continued to remain overbought, extended and exuberant on “hopes” that Trump’s policies will be the ointment to cure the economy’s ills. As noted yesterday, exuberance has exploded in everything from consumer to investor to business optimism.
The explosion of optimism is interesting given the consistent diatribe over the last few years about how well the economy was performing under the previous administration. This is the equivalent of a company’s stock price surging when the previous CEO is replaced which doesn’t speak well of his “legacy of performance.”
The question now is whether or not “hopes” will translate into “reality.”
Interestingly, since the beginning of the year, the rush to pile into “Trump Trades” has quickly evaporated as transaction volumes have plunged as “anticipation” has turned into “wait and see.”
It is worth noting that previous, when transaction volumes have plunged to such low levels, the markets were generally at an inflection point of a correctionary process. With the markets currently extremely overbought and extended, the reality of a “sell the inauguration” trade is possible.
In the end, “anticipation” of better outcomes is one thing when it comes to the financial markets and your money, however, “reality” is quite another.
Here is what I am reading this weekend.
Fed, Economy & Trump
- Yellen-Trump & The Coming Recession by James Rickards via Daily Reckoning
- Slow Fade Of Jobs Growth by James Picerno via Capital Spectator
- Goldman Sachs: 3 Things To Wreck The Economy by Lucinda Shen via Fortune
- A Case For Trump’s Import Tariff by Stephen Moore via The Washington Times
- Trump Should Embrace Free Trade by Robert Zoellick via Washington Post
- Trump’s Job Jawing: Good Politics, Bad Policy by Robert Samuelson via RCM
- Krugman Turns Hawkish W/GOP In “Da House” by Kevin Williamson via National Review
- Growing Economy & Deficits by Paul Krugman via NYT
- Infrastructure Spending May Not Boost Growth by Mihir Sharma via Bloomberg
- Don’t Expect Bond Vigilantes To Do Fed’s Work by Caroline Baum via MarketWatch
- Trump Can’t Repeal Economic Laws by Joseph Stiglitz via Project Syndicate
- Trump’s Protectionist Plan Nothing New by Alexia Campbell via The Atlantic
- Wall Street, Fed Have Stacked The Deck by David Smick via American Conservative
Markets
- Corporate Bond Market: Binge Borrowing by Danielle DiMartino-Booth via Money Strong
- Nomi Prins: More Corporate Defaults In 2017 by Craig Wilson via Daily Reckoning
- Trump Oil Trade & $100/bbl Oil by Kirk Spano via MarketWatch
- Wall Street Hates “Volcker Rule,” Will Trump Kill It by Matt Egan via CNBC
- Will Inauguration Mark A Top? by William Watts via MarketWatch
- Bull-Turned-Bear – Lee See Trump Danger by Jeff Cox via CNBC
- 4-Reasons Trump Rally Has No Legs by Jake Weber via Forbes
- Prudent Things For Investors To Do by Nigam Arora via MarketWatch
- Why You Should Be Wary Of Junk Bonds by John Coumarianos via WSJ
- Why 2.6% Is More Important Than 20,000 by Bill Gross via Janus Capital
- If You Bought Trump Rumor, Sell The News by Mark Hulbert via MarketWatch
- The Case For Remaining Invested by Goldman Sachs
- The Invisible Stock Market Correction by Michael Kahn via Barron’s
Interesting Reads
- Financial Stress Rings In New Year by Center For Retirement Research
- Death Spiral Of Sears To Bankruptcy’s Edge by Hayley Peterson via BI
- American’s Blowing It With Debt by John Pelletier via USA Today
- Fair Share? Top 400 vs Bottom 50% by Mark Perry via AEI
- 7 Ages Of Retirement That Matter by Matt Carey via Forbes
- How Trump Could Create A Financial Crisis by Matt O’Brien via Wonkblog
- Why Millennials Aren’t Afraid Of Socialism via Julia Mead via The Nation
- Facts Every Retiree Should Know About Annuities by Matthew Frankel via Motley Fool
- Suddenly, Homes Sale Agreements Are Falling Apart by Patrick Clark via Bloomberg
- Trump Makes Jobs Error During Presser by Steve Liesman via CNBC
- What Really Caused The Housing Crisis by Mark Thoma via CBS MoneyWatch
- Animal Spirits by Ed Yardeni via Yardeni Research
- BofA Warns Consumer Spending Tumbled by Tyler Durden via ZeroHedge
- 4-Reasons Fiscal Policy Won’t Restart Business Cycle by Tyler Durden via ZeroHedge
- Why Home Builders Can’t Meet Demand by Aaron Layman via AaronLayman.com
- Economic Risk Of Ignoring Arithmetic by John Hussman via Hussman Funds
- Are Oil Speculators About To Get Lit Up Again by Dana Lyons via Tumblr
- Might Want To Prepare Your Portfolio by Jesse Felder via The Felder Report
“Stock market bubbles don’t appear out of thin air. They have a basis in reality. But that reality is distorted by misconception” ? George Soros
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