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Overnight – “Trump Trade” becomes ”Trump Trap” as uncertainty brings back the bears
Investors are clearly fed up with the erratic nature of President Trump as indices were heavy yet again overnight, dropping below the November 4 election levels as the “Trump Trade” looks to be becoming the “Trump Trap”
President Donald Trump’s temporary reprieve to Mexico and Canada from imported duties imposed just days ago failed to ease tariff-fueled jitters.
Investors appear to be waiting on the sidelines until further clarity on the trade policies emerge following wild swings from the Trump administration on recently imposed tariffs on Mexico and Canada.
President Donald Trump announced that all goods and services from Mexico that comply with the USMCA would be granted a one-month delay from the recent 25% duties imposed on Mexican imports. The announcement came a day after the White House granted U.S. automakers complying with the USMCA a one-month reprieve from the tariffs. Canada is reportedly also expecting to be granted a similar exemption, according to multiple media outlets.
Investors are now keenly awaiting Friday’s employment report, to gauge the health of the U.S. economy, and the Federal Reserve’s future interest rate trajectory amid fears the new tariffs, coupled with rising raw material costs at factories, suggest inflation may increase in the coming months.
Employment expected at 150k and the unemployment rate at 4.0%
We are strongly recommending high levels of cash in the portfolios
ASX SPI 8019 (-0.98%)
The selling in yesterdays session was wise from our market as investors finally give up on the Trump trade and look ahead into uncertainty.
Payrolls in the US tonight could trigger a faster paced fall, so a return to cash would be very wise
