Trump Speech Reverses Trump Trade?
January 24, 2017
Dennis Gartman is editor and publisher of The Gartman Letter, and strategic advisor of the AdvisorShares Gartman Currency Hedged Gold ETFs (GEUR & GYEN). He regularly contributes to AlphaBaskets and lends his institutional insight to educate advisors and investors about commodities and the forex markets, including about trading gold in different currency terms.
The US dollar has fallen rather sharply and “universally” as the Trump Era has begun and as the world has tended to look rather badly upon the President’s inaugural speech and as he seems to have focused not upon health care, or upon the military or upon Russia, but upon the size of the crowds. Whether this was or is a result of the “press’” antagonism toward the President is another question for another time, but what the world is concerned with is that the President seems concerned about the immaterial. He has more concerns than crowd size… doesn’t he?
The President also surprised us… and many others… when he made it very clear that he was going to pursue a “protectionist” philosophy, saying midway through his inaugural speech that Every decision on trade, on taxes, on immigration, on foreign affairs, will be made to benefit American workers and American families. We must protect our borders from the ravages of other countries making our products, stealing our companies, and destroying our jobs. Protection will lead to great prosperity and strength.
He would have done well to have avoided the term “protection,” and we will grant that perhaps he was only commenting here with protection of the US borders, but nonetheless this comment gave us pause. This will resolve itself over time… we hope… but for now those concerns weigh upon the dollar.
Also the market is concerned that Mr. Trump said yesterday at a swearing-in ceremony for thirty of his assistants that he was going to focus quickly upon renegotiating the NAFTA, and was rather shocked by his sneer when he said “NAFTA.” Finally the market is concerned that Mr. Trump has no apparent intention of giving up on “tweeting” and will continue to do so long into his tenure as President. This shall only breed confusion; it cannot be good.