Trump “Toast” ? Just a Matter of When

Investor’s first read – Daily edge before the open
DJIA: 20,636
S&P 500: 2,349
Nasdaq  Comp.5,856:
Russell 2000:1,361
Tuesday, April  18, 2017    8:54 a.m.
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As expected, the market rebounded sharply from Friday’s test of the March lows. For the DJIA and S&P 500, that was a 50% retracement of the January to February surge, for the Nasdaq Comp., it was a 30% retracement.
      Obviously, the Street has not given up on Trump’s promise for a massive stimulus, though the timing is harder to nail down.
      The market has trended sideways-to-down since late February, a consolidation that weeds out profit takers and nervous investors, generally a positive sign.
      What the bulls need is an indication that Congress will begin to address tax reform in the fall, as well as provide the Street with details on who gets the big spend, infrastructure or defense ?
       Currently, it looks like the military is an easier sell.
       The entire 8-year, 260% bull market has resisted a host of negatives and uncertainties, which must be attributed to the successful rescue operations from the 2007 – 2009 meltdown and a low interest rate policy by the Fed, offering little alternative for investors but to buy stocks.
TODAY
      Expect a pullback in early trading, then an attempt to extend yesterday’s rally.       

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SUPPORT “today”:DJIA:20,576;S&P 500:2,340; Nasdaq Comp.:5,546
RESISTANCE:“today”:DJIA:20,676 ;S&P500:2,361 ;NASDAQ Comp.:5,871

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POLITICAL/STOCK MARKET
Trump – “toast” ?
     
Monday, President Trump slammed the media with a tweet, “The fake media has gotten even worse since the election. Every story is badly slanted. We have to hold them to the truth.”
      He has referred to the investigation of collusion between the Trump team and Russians to skew the election in his favor as, a “phony story,” a “total scam.”
      Sounds like he is setting the stage for news releases indicating collusion.  Really, why would the President of the United States take time early in the day with other things on his plate, to tweet this kind of rubbish ?

      Just a hunch, but I think collusion regarding influencing the election is only part of something much bigger, like major league money transfers for options on oil investments, real estate holdings, land deals.That’s why it is taking so much time.
      If we begin to see more and more of VP Pence, it may suggest the end for Trump is getting closer. Clearly, the inside knows something is about to break.  Trump is “toast,” IMVHO.
      There are so many people who know so much, and they are going to be watching out for number ONE, and that is not Donald Trump.
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      While President Trump has moderated on some of his campaign rhetoric, he is unpredictable and unqualified to make decisions at this level, but Congress will waste little time seizing an opportunity of their lifetime – to ruthlessly, senselessly and wantonly dismember a system that works well without the intrusion of Republicans.
      The rape and pillage of our federal government continues, as Republican Thomas Massie  introduced a bill in February aimed at terminating the Department of Education effective December 31, 2018. This coincided with the Senate confirmation of Conservative Betsy DeVos, a long time advocate of school vouchers and critic of public education.

      As a budget is being developed, we can expect a major revamping of the nation’s government structure and huge cuts.
      Mick Mulvaney, director of the Office of Management and Budget plans to streamline the U.S. government structure by drastic reallocation of resources away from social “Great Society” programs to the Dept. of Defense and Homeland Security.
      Action is already underway to gut the EPA and Dept. of Education, but the administration’s efforts are bound to encounter Congressional opposition, since budget cuts and the elimination of agencies will undoubtedly have widespread impact, none the least of which may be the loss of Republican House and Senate seats in 2018.
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WHY TRUMP WOULD PUT US  ON  A WAR FOOTING !
       THE STAGE IS BEING SET NOW !
      
Expect the Trump administration to put the United States on a war footing within one year, probably regarding North Korea.  For one, it would justify its big military spend. For another, it would facilitate a mid-term election victory, since voters are reluctant to change  Congress significantly when the nation is gearing up for war.. It worked for George Bush in 2003.  Finally, it would deflect attention away from the Trump/Russia issue, that could sink the administration.
ALL OF THE ABOVE HAS THE POTENTIAL TO ADVERSELY IMPACT THE STOCK MARKET  AND   MERITS CONSIDERATION.
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CORPORATE EARNINGS (updated  April 14, 2017)
Factset
      Q1 earnings are projected to increase 9.2%. That compares with a Q1 est. on Dec. 31 of +12.5%.  Q2 growth  is projected at +8.7%, Q3 at +8.2%, and Q4 at +12.6%. For 2017 as a whole growth is projected at a plus 9.7% down from Dec. 31 estimates of 11.6%.  Currently, the P/E on forward  earnings is 17.4 x. That compares with a 10-year average P/E of 14.0.
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MY TECHNICAL ANALYSIS  of the 30 DJIA Companies
:  (UPDATED 4/13/17 and )
      On occasion, I technically analyze each of the 30 DJIA stocks  for a reasonable risk, a more extreme risk, and an upside potential over the near-term. I add the results of each, then divide by the new DJIA “divisor” (0.14602) to get the DJIA for those levels. This gives me an internal check on the DJIA itself, especially if certain higher priced stocks are distorting the averages.
      As of  March 29, 2017,  a reasonable risk is 20,413 a more extreme risk is 20,196.Near-term upside potential is 20,676
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ODDS FAVOR
1-Trump’s presidency will implode within three years, Bannon will be gone, along with Breitbart News and Alt-Right’ influence.
2-Trump will put the United States on a war footing with North Korea in coming months with or without China’s cooperation.

Conclusion: It is happening now
3-Expect major domestic violence this summer as alt-Right groups confront protestors against tax reform and Congress’ gutting of a host of popular government programs.

Conclusion: It started on Easter weekend in Berkeley.
4-Seeds of a recession will be planted as Congress guts programs needed and used by millions.  Stock market has its final run.
5-Social Security and Medicare will be targeted for drastic changes if the Republicans hold control of both houses in 2018 and Congress is successful in gutting most of social service programs and the EPA per Trump’s wish list.     
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George Brooks
Investor’s first read
A Game-On Analysis, LLC publication
Brooks007read@aol.com
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Investor’s first read, is a Game-On Analysis, LLC publication for which George Brooks is sole owner, manager and writer.  Neither Game-On Analysis, LLC, nor George  Brooks  is  registered as an investment advisor.  Ideas expressed herein are the opinions of the writer, are for informational purposes, and are not to serve as the sole basis for any investment decision. References to specific securities should not be construed  as particularized or as investment advice as recommendations that you or any investors purchase or sell these securities on their own account. Readers are expected to assume full responsibility for conducting their own research pursuant to investment in keeping with their tolerance for risk.

 

 

 

 

 

 

 

 

 

 

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