By Donald Trump has been busy since his decisive victory in the US Presidential Election in early November.
But Monday’s address following his inauguration, and the unscripted speech accompanying his signing of a stack of executive orders, was a statement of intent.
Certainly in terms of where he wants to take the US.
Not so much ‘leader of the free world’, much more an all-out effort to make Trump’s America ‘Numero Uno’, boosting the country’s exceptionalism, withdrawing from international bodies, growing its wealth while winding up its neighbors and ultimately flying to Mars.
President Trump announced the US withdrawal from the World Health Organisation, and more significantly, the Paris climate accords.
The latter will annoy an awful lot of people.
But it is completely in line with Mr Trump’s longstanding promise to revoke offshore oil and gas leasing bans, and encourage US energy producers to:’ Drill, baby, drill!’
And if the US wants to confront China as the world’s most heavily subsidized manufacturer and exporter, and thereby put a dent in the US’s trade deficit with China, then encouraging ‘Made in the USA’ by driving down energy prices is certainly one approach worth trying.
How effective it will be is another matter. After all, if you increase supply and drive prices down, there comes a point when oil and gas production becomes uneconomic.
Oil prices were already down before any announcement.
Crude is doing its own thing, a downside correction following a six-week rally that saw front-month WTI gain 19%.
The world’s crypto bros were left disappointed.
President Trump failed to mention anything about a US crypto reserve, crypto deregulation, or crypto itself.
Bitcoin soared to an all-time high ahead of Mr Trump’s inauguration on the expectation of some sort of positive announcement, and following the somewhat controversial release of the $TRUMP token on Friday night.
But traders rushed to bail out of their speculative long son Monday evening.
Despite this, Bitcoin held above $100,000, and the market can still look forward to President Trump’s exceedingly crypto-friendly appointments at the Treasury and Securities and Exchange Commission.
Aside from this, the US dollar first slumped and then rallied. The sell-off followed Trump’s initial dismissal of tariffs as not a ‘Day One’ issue.
But then it bounced back a touch after he proposed 25% tariffs on Canadian and Mexican exports to the US from 1st February.
Initially, the only comment concerning tariffs and China was made about reaching a deal over TikTok.
But on Tuesday evening, Trump said he was pondering a 10% tariff on Chinese imports at the beginning of next month.
Despite this, US stock indices have continued to push higher, helped along by a pullback in bond yields. Plus can change.
The S&P 500 is now within 0.5% of its all-time high.
One thing traders can look forward to again is the President’s extraordinarily free and ill-disciplined method of communicating his thoughts and decisions.
He also has a habit of picking on people until they do what he wants. That could mean a whole load of pressure on the Federal Reserve to cut rates further.
And with Musk by his side, there’s a fair chance we’ll hear about it on ‘X’ first.
(David Morrison is a Senior Market Analyst at Trade Nation. Views are his own.)
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