Will Donald Trump Produce Any Economic Growth?

The Federal Reserve does not seem to believe that Donald Trump is going to do anything to produce economic growth because they were more optimistic last year when they knew that Obama was going to be the President than they are now, knowing that it is going to be Donald Trump.

The Housing Market Has Been Propped Up By The Fed, Not Ready To Stand Alone

Both the housing market and the auto market have been propped up by the Federal Reserve’s cheap money and artificially low interest rates. These markets may not be ready to stand alone. (Ford (F), General Motors (GM), Tesla Motors (TSLA), iShares Dow Jones US Real Estate (ETF) (IYR), Lennar Corporation (LEN), KB Home (KBH))

Markets: If Interest Rates Go Up, The Bubble Pricks

We have a bubble economy. If interest rates go up, the bubble pricks. If you move interest rates higher, by definition, stocks and real estate are less valuable. They are more valuable the lower the rate. If interest rates go up, their values come down, multiples have to go down. (SPDR S&P 500 Index ETF (SPY), SPDR Dow Jones Industrial Average ETF (DIA), Nasdaq 100 Index ETF (QQQ), iShares Russell 2000 Index ETF (IWM), iShares Barclays 20+ Year Treasury Bond ETF (TLT), iShares Dow Jones US Real Estate (ETF) (IYR))

Stock Market: The Trump Rally

This honeymoon is going on, and everybody thinks this is great and the narrative is feeding on itself but people are ignoring the big rise in interest rates and assuming none of it matters. All of a sudden higher rates do not matter because we are going to get all this extra growth from the tax cuts and from the government stimulus. Well, the rarity is if interest rates rise it does not matter about the stimulus, the sedative that will result from higher rates will more than offset it, plus the markets are assuming that higher interest rates will have no effect on U.S. asset prices or the economy. They are wrong on both those counts.

Rising Oil Prices & Interest Rates Will Negatively Impact Stock Prices

Crude oil prices and long term interest rates are continuing to surge, yet stock market traders and investors are completely ignoring what this will mean for corporate earnings and stock valuations. (SPDR S&P 500 Index ETF (SPY), iShares Russell 2000 Index ETF (IWM), SPDR Dow Jones Industrial Average ETF (DIA), Nasdaq 100 Index ETF (QQQ))

U.S. Dollar: The Bearish Case

Right now everybody is talking about how the Federal Reserve is going to tighten, how they will be raising interest rates and they have not connected the dots that all of this is impossible with what Donald Trump and the new secretary of the Treasury are proposing to do. None of this can happen against the backdrop of rising interest rates, it is impossible! It can only happen if the Federal Reserve prevents interest rates from rising by stepping into the market with massive rounds of Quantitative Easing (QE). If people understood that, the Dollar would be falling and not rising.