'Day One' Inflation, 'Day One' Slowdown: Trump Is Not Backing Down


  • Inflation is going to jump "day one" of the presidency.
  • Many thought the president would flip or back off from his strong stance. Based on recent tweets and news he will not.
  • 35% taxes, 45% tariffs, and maybe newer strategies are about to hit the economy. However they get flowed, they initially either spark inflation or sap profits.
  • This is not a positive fundamental market setup.

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We recently showed that many of President-elect Donald Trump's trade policies are "day one" events. These policies will immediately add to inflation and immediately slow the economy. Many thought President-elect Trump would back down. We wrote we did not. He has proven of late that he is driven and very intent to carry out his plans.

Tariffs and taxes add expense that either gets passed through or eaten. Tariffs on other countries and broken deals, at least initially, will slow trade and so the economy. This is an imminent stock market (NYSEARCA:SPY) risk.

"Day One"

Many of the toughest trade policies are "day one" events for President-elect Donald Trump.

Keep in mind if he were backing off from these he could just change his website's wording or order. He has not. If anything he has continuously proven out his hardline stance with recent tweets about China and threats against US businesses looking to leave to Mexico.

In mid-November, we gave evidence as to why we did not think President-elect Trump would back down. He has not.

In that report, we cited his website's trade policies and which ones he said were "day one" events.

Let's review.

1. Withdraw from the Trans-Pacific Partnership ("TPP"): DAY ONE.

2. Appoint tough and smart trade negotiators: DAY ONE.

3. Identify every violation of trade agreements and use every tool by law to end these abuses: DAY ONE.

4. Renegotiate or withdraw from NAFTA. DAY ONE.

5. Label China a currency manipulator: DAY ONE.

6. Sue China for unfair trade: DAY ONE? Not sure.

7. Tariff China and other measures? DAY ONE? Not sure.

In the current "transition" period before he takes office, the media has been filled with president-elect quotes aggressively supporting many of these moves.

Let's see.

President-elect Trump Is Full

This article was written by

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Author of Fed Trader
Be ahead of markets with a Fed expert.
Hi, I'm Chaim Siegel. I've run Elazar since inception. I've worked for big hedge funds as a trader, analyst, PM and water boy. 
Starting out I could make a mean straight black coffee. But ask me to add some sugar or milk though was a problem. So they got fed up and said, just give him some stocks to follow. That was in the 90s tech boom. Yeah. That worked out. 
So, now, mid-life crisis I enjoy second guessing the Fed, which is usually a good strategy. They are not traders, they have no risk discipline, they are having way too much fun with this QE-QT thing and because of their powerful position, are usually way too over-confident in their decision making which is a hint to bad decision making.
My customers have seen that I've been net net pretty good at consistently second guessing the Fed.
Our EPS estimates factor into Street numbers.
I've been on CNBC and a few other places.
But mostly I really just enjoy second guessing the Fed and keeping it simple.
Wishing you all continued success.

Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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