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The MAGA Trend Continues: Trump Convinces Carrier to Remain

Written by Nathan McDonald CLICK HERE FOR ORIGINAL)

 

 

 

 

Already, we have discussed the “Trump effect” that is gripping America. We are seeing people and companies turning theirbacks on globalism in record numbers and beginning to think about America first.

 

 

The time for the West to begin taking care of itself once again is now. The elite who have ruled over us for decades have gutted our jobs, siphoned off our wealth, and at the same time, made us feel guilty for our past successes. This trend is fortunately coming to a stop.

 

 

Already, Donald Trump has made deals to keep a Ford SUV plant in America and Foxconn is strongly considering moving their manufacturing back to the United States. Both of these are huge wins for Americans and have been discussed at length on this blog, but the MAGA trend doesn’t stop there.

 

 

One of the strongest talking points that Trump uttered on his campaign trail was about Carrier, the massive air-conditioner company that decided to move its manufacturing to Mexico, during the election cycle.

 

 

This decision became a focal point of the Trump campaign, where he made very serious threats of imposing tariffs on the company if they decided to gut these coveted American jobs.

 

 

It appears he was serious, serious enough for the company to take notice and reverse this decision, as reported by the New York Times.

 

 

This decision has been confirmed by the heads of Carrier, as well as Donald Trump himself, who both state that after a lengthy discussion, the decision was reached.

 

 

— Donald J. Trump (@realDonaldTrump) November 30, 2016

Once again, this victory proves that Donald Trump is a man of action, a businessman who gets results, not a politician that simply jawbones and says what you want to hear, not what you need.

 

 

I predict that we are going to see this trend continue and we are going to see American business moving back to the United States at rates never before seen. This will be a watershed moment in history, as GOOD paying jobs return and help support this desperately failing economy.

 

 

Will this ultimately put off the ultimate collapse of fiat currency? Perhaps not, but it is worth a shot. Only time will tell if we can reclaim our past glory. We can hope, at least for now.

 

 

Please email with any questions about this article or precious metals HERE

 

 

 

 

 

The MAGA Trend Continues: Trump Convinces Carrier to Remain

Written by Nathan McDonald CLICK HERE FOR ORIGINAL)

via http://ift.tt/2fDuV66 Sprott Money

Having warned for nearly all of 2016 that the market is getting ahead of itself on the back of median P/E multiples that are higher than 99% of all historical reading, Goldman chief strategist David Kostin stubbornly kept his year end S&P target at 2,100 on valuation concerns.

Today, however, with oil soaring and the S&P at all time highs, he finally threw in the towel as a result of the Trump victory, and in a report Kostin writes that the Trump “Hope” will dominate through 1Q 2017 as S&P 500 climbs by 9% to 2400.  However, at that point, “less-than-expected tax cuts and higher inflation and interest rates will limit both upward EPS revisions and any P/E multiple expansion. S&P 500 will end next year at 2300, reflecting a price gain of 5% and a total return of 7% including dividends.”

Here is the summary from Goldman:

• US equity investors have focused “more on hope than n fear” since Donald Trump’s election. Ironically, many commentators believe his campaign rhetoric focused “more on fear than hope.” In 2017, we expect the stock market will be animated by competing views of whether economic policies and actions of President Trump and a Republican Congress instill hope or fear.
• “Hope” will dominate through 1Q 2017 as S&P 500 climbs by 9% to 2400. The inauguration occurs on January 20 and our Washington economist expects much legislation will be proposed during the first 100 days. The prospect of lower corporate taxes, repatriation of overseas cash, reduced regulations, and fiscal stimulus has already led investors to expect positive EPS revisions. Instead of our baseline adjusted EPS growth of 5% to $123, growth could accelerate to 11% and reach $130, which would support a P/E multiple above 18x. Top “Hope” investment recommendations: (1) Cyclicals vs. Defensives; (2) Stocks with high US versus foreign sales exposure; and (3) High tax rate companies.
• “Fear” is likely to pervade during 2H and S&P 500 will end 2017 at 2300, roughly 5% above the current level. Our economists expect inflation will reach the Fed’s 2% target, labor costs will be accelerating at an even faster pace, and policy rates will be 100 bp higher than today. Rising inflation and bond yields typically lead to a falling P/E multiple. Congressional deficit hawks may constrain Mr. Trump’s tax reform plans and the EPS boost investors expect may not materialize. Potential tariffs and uncertainty around other policy positions may raise the equity risk premium and lead to lower stock valuations in 2H. The median stock trades at the 98th percentile of historical valuation based on an array of metrics. Top “Fear” investment recommendations: (1) Low vs. High labor cost companies; and (2) Strong vs. Weak Balance Sheet stocks.
• Money flow represents a potential upside to our baseline forecast. Equity mutual fund and ETF inflows may benefit as investors lose money owning bonds. After years of active management underperformance and outflows, higher return dispersion will increase the alpha opportunity for investors skilled enough to capture it. Economic policy uncertainty and the later stages of the economic cycle are typically associated with higher stock return dispersion

And the details which, among other things, include a discussion of Alexis de Tocqueville:

• 1. Earnings. S&P 500 operating EPS will grow by 10% to $116 in 2017 and adjusted EPS will increase by 5% to $123. Investors are excited about a prospective cut in corporate taxes that could boost adjusted EPS to perhaps $130, representing growth of 11%. However, our economists are skeptical that all the anticipated tax cuts will take place given the federal budget deficit constraints. Some tax reform will take place and upside exists to our baseline EPS forecast but it will be less than many investors now expect.
• 2. Inflation and interest rates. In terms of inflation, core PCE will reach the Fed’s 2% objective by the end of next year. The Fed will hike interest rates next month and three additional times in 2017. Ten-year US Treasury yields will rise to 2.75%.
• 3. Valuation. S&P 500 currently trades at 19x our forward top-down operating EPS estimate, 18x our forward top-down adjusted EPS and 17x our upside adjusted EPS scenario. The market trades at 17x forward consensus bottom-up adjusted EPS. US equities are highly valued relative to history on most metrics and versus inflation and interest rates. We forecast static valuation during the next 12 months.
• 4. Path and target. We expect the S&P 500 index will rise to 2400 (+9%) by the end of 1Q as investors embrace the possibility that lower taxes will lead to positive EPS revisions. But less-than-expected tax cuts and higher inflation and interest rates will limit both upward EPS revisions and any P/E multiple expansion. S&P 500 will end next year at 2300, reflecting a price gain of 5% and a total return of 7% including dividends.
• 5. Buybacks and dividends. Buybacks will rise by 30% as companies repatriate cash held overseas. Dividends will rise by 6% in 2017, above the 4% growth rate currently implied by the dividend swap market.
• 6. “Hope” vs. “Fear” strategies: “Hope” will dominate during the first part of 2017 as Cyclicals beat Defensives. Firms with high domestic sales will outperform along with companies with high tax rates. “Fear” will dominate later in the year when investors focus on rising inflation and interest rates. Low labor cost and strong balance sheet firms will outperform.

And the charts:

via http://ift.tt/2g6RPyB Tyler Durden

VIX has been gapping around like a penny stock all morning with multiple slams producing an exuberant equity open (supported by soaring oil prices) but for now selling pressure is back as Oil and Stocks recouple.

Vix tails are back…

 

And that helped jam stocks to fresh record highs at the open…

 

And oil caught up to stocks…

 

All algos all the time.

via http://ift.tt/2gkAmpG Tyler Durden

When we looked at the latest disappointing spending data this morning, we warned that GDP would likely be weakned, however we had no idea by just how much. The answer was revealed moments ago courtesy of the Atlanta Fed, which moments ago updated its GDPNow model and said that its forecast for real GDP growth in the fourth quarter of 2016 is 2.4 percent on November 30, down from 3.6 percent on November 23.

From the report:

The forecast of the combined contributions of real net exports and real inventory investment to fourth-quarter growth fell from 0.61 percentage points to 0.18 percentage points after last Friday’s advance economic indicators report from the U.S. Census Bureau. The forecast of fourth-quarter real consumer spending growth fell from 3.0 percent to 2.2 percent after this morning’s personal income and outlays release from the U.S. Bureau of Economic Analysis.

And now, the sellside revisions will follow.

via http://ift.tt/2gVqXG7 Tyler Durden

Pending Home Sales rose just 0.2% YoY in October, among the weakest of the year.

 

This is made more troublesome since these sales occurred before the election, before the mortgage rate exploded higher and before mortgage applications collapsed…

 

We are sure Yellen has this all “contained.”

via http://ift.tt/2gxvKtK Tyler Durden

Protected by their constitutional freedoms, Reuters reports that a small group of hard-left activists burned foot-long U.S. flags outside the Trump International Hotel in New York on Tuesday, in an angry response to a tweet by President-elect Donald Trump that flag-burners should face legal consequences.

 

"Oops!" We did it again
Reject a Fascist America#FlagBurningChallenge#1stAmendment#NotMyPresident#NoDAPL#RevCom http://pic.twitter.com/YqxY69xNIO

— Sunsara Taylor (@SunsaraTaylor) November 29, 2016

 

Following Donald Trump's tweet yesterday…

Nobody should be allowed to burn the American flag – if they do, there must be consequences – perhaps loss of citizenship or year in jail!

— Donald J. Trump (@realDonaldTrump) November 29, 2016

Which was supported by Hillary Clinton in the past, protesters burned United States flags in New York.

U.S. media outlets, including the New York Times, published articles detailing the court rulings, and some Republicans as well as Democrats took to social media to say Trump was in effect threatening to punish dissent despite constitutional protections.

 

The U.S. Supreme Court ruled in 1989 that flag-burning was not a crime but rather a form of protest protected by the First Amendment of the Constitution. The high court has also ruled more than once that citizenship cannot be revoked.

The activists included members of the Revolutionary Communist Party, which the news outlet notes is not part of the Community Party of the United States.

via http://ift.tt/2gIxS2r Tyler Durden

The surge in strong economic data continued moments ago when the Chicago PMI printed at a whopping 57.6, surging from last month’s 50.6, and print not only above the consensus estimate of 52.5, but also above the highest forecast provided by 32 economists. This was the highest print since January 2015. Four of the five Barometer components increased, with only  Employment falling.

The increase added momentum to the fourth quarter, with the  three-month trend ascending to 54.1 this month, up from 52.1 in the  three months to October.

According to MNI, the rise in New Orders contributed the most to the increase in the Barometer, increasing 10.7 points to 63.2 in November. Production also rose, regaining virtually all of October’s fall. Order Backlogs  jumped out of contractionary territory, where it had been over the past three months, while Supplier Deliveries saw a smaller rise. Despite higher orders and output, demand for labor fell. Employment slipped back into contraction, making last month’s recovery short-lived.

This month’s special question asked firms how they expected business activity to fare in 2017. Most respondents expected businesses to do somewhat better than in 2016. Most respondents expected their business to grow less than 5% next year but there were many who were more optimistic and expected growth to be above 10%. The path of interest rates and the election outcome were said to be important factors that could impact activity in the coming year.

Companies increased their stock levels at the fastest pace since October 2015, with the Inventories Indicator moving back into expansion in November.

Inflationary pressures at the factory-gate eased slightly after picking up last month. Prices Paid fell to 56.8 in November, although staying above the 12-month average of 52.2.

“The November reading for the Business Barometer marked the sixth month of expansionary business activity in the US. Strength in orders, a recovery in oil prices and the stronger dollar have all impacted businesses with varying degrees.

“Respondents to our survey also remain optimistic about business activity in 2017 although the new government’s policies and the Fed’s approach towards monetary tightening would impact the course of business activity over the next year.” said Shaily Mittal, senior economist at MNI Indicators.

via http://ift.tt/2gVkcnz Tyler Durden