He's a business person. He's anti-regulation. He is willing to borrow. He wants to cut taxes.
These are things bulls like in a President. There's a lot of other baggage that comes with President Trump.
But those are core tenets and they are views that send markets higher.
The downside?
We have to borrow to pull of his vision. Rates are very low so he could easily offer a trillion-dollar 30-year -- he has said he wants to spend a trillion in infrastructure -- and it would be lapped up. All of the goodies that come with infra spending, Martin Marietta Materials MLM, Vulcan Materials (VMC) , Cummins (CMI) , Caterpillar (CAT) , all go up enough, especially the latter two because people will feel that they can make up for what had been a slow U.S.
So the downside?
That's inflationary.
The Fed will take rates up and up.
So now upside again: buy banks, they win.
Plus, if you crush regulation there will be more businesses opened. If you cut rates there will be more risk taken. There will be more building.
That's what happens.
Now the biggest move he could make to get the bond vigilantes off his back is to get back some of that $1.6 trillion that's overseas. He's got to find a way to get it back.
Got to.
Second biggest move: get the government off the drug companies' backs.
Third, let the defense spend begin. Northrop Grumman (NOC) and Lockheed Martin (LMT) .
Fourth: let the mergers occur. The Justice Department's antitrust division will be eviscerated.
So, sounds like everything's a buy.
No.
Rates going higher are bad for the bond market equivalents.
We will be in a much more uncertain world, particularly with the Middle East.
Third, 17 out of 30 stocks in the Dow, for example, need more globalization, more foreign trade.
I cannot imagine a scenario right now where world trade is spurred by this election.
Domestic? Yes.
World, no.
Sometimes it will be a balance. More pro drug but can our drug companies be boxed out?
Hard.
But consumer packaged goods? They can get hurt.
Companies that have done a lot of business in China: Yum China, Action Alerts PLUS holding Starbucks (SBUX) , Nike (NKE) , Cat, all troubled.
So we have to give up the 2% we gained since James Comey vindicated Clinton.
And then it's game on.
