Trump dump

BofAML Survey: Trump Trades Fade As Investors Sweat Strong Dollar, Policy Dangers
Jan 17 2017 | 8:07pm ET

By Jamie McGeever (Reuters) - Worries over Donald Trump's economic policies and the potential for U.S. policy errors rose sharply this month, according to a survey of fund managers released on Tuesday, prompting them to hold more cash even though they expect growth and inflation to rise further.

Bank of America Merrill Lynch's monthly fund manager survey for January also showed that the highest proportion of investors since 2006 think the dollar is overvalued, and the highest in almost 14 years think the euro is undervalued.

The monthly survey of 215 clients with $547 billion of assets under management was conducted between January 6 and 12, two months after the U.S. election and just days before Donald Trump's inauguration as the 45th president of the United States.

Since Trump's victory, U.S. stocks have hit record peaks, tumbling bond prices have pushed yields up to multi-year highs, and the dollar has reached a 14-year high even in the face of an OPEC-fueled surge in oil prices.

But these so-called 'Trump trades' have faded since the turn of the year. Investors are increasingly nervous about what a Trump administration's policies will be and how they will affect world trade, growth and financial markets.

"Why high cash? 3 big 'tail risks' are trade war/protectionism (29%), US policy error (24%), China FX deval (15%)," BAML's global strategy team, led by Michael Hartnett in New York wrote in a note styled on the 140 character messages on Twitter, the social media platform favored by Trump.

The biggest 'tail risks' in last month's survey were: concern of further European union disintegration or bank defaults (29 percent), and a stagflationary crash in the bond market (26 percent).

Being long U.S. dollars was the most crowded trade "by a country mile", cited by almost half of all respondents (47 percent), followed in a distant second place by short government bonds (11 percent).

The number of respondents expecting above-trend growth and inflation rose to 17 percent from 12 percent, the highest in five-and-a-half years, the survey showed.

Asked what level of 10-year U.S. Treasury yield would trigger an equity market correction, more than half of respondents (53 percent) said 4 percent, a fifth said 5 percent, and 16 percent said 3 percent.

The benchmark 10-year yield is currently 2.35 percent. It nudged 3 percent three years ago but hasn't been above that on a consistent basis for almost six years. It hasn't been above 4 percent since before the global financial crisis.

January's survey showed that fund managers raised their equities allocation to a 13-month high and cut their bond allocation to a 13-month low. The percentage of respondents expecting corporate earnings to rise 10 percent or more rose to its highest since June 2014.

from FINALTERNATIVES

 

Oh you skipped from hacking to illegal immigration. Is it really icy where you live?

By he way I don't think the hacking really effected the election. But don't call yourself a patriot if you are OK with foreign powers hacking American entities.

 

You don't consider crossing physical borders illegally an act of hacking the country?
So patriotic of you.
As for electronic hacking it happens all the time, foreign powers & individual groups hack American entities, American entities hack foreign powers. But this is not a political issue but a 24/7 job of the intelligence agencies to secure national infrastructure. You can't stop covert ops by imposing sanctions.

 

There is no arguing that he won, but clearly, Russia wants him so badly to be our president.

 

Feeling really sorry for people who voted Trump. He doesn't know a thing about anything. Look how he reacts to criticism – if a person says criticisesTrump, he always responds with a tweet that this person is overrated, fat, ugly and so on and so forth.

 

Who was that person?

 

OK, so you,re 14 years old and a dumb juvenile.

 

Worry about yourself and your future. We don't need your tax money.

 

Are you OK with foreign powers giving 23 million dollars to the Democrat party? That's not trying to influence an election, is it?

 

Is that the reasoning skills of a trump suporter? Or is that the debating skills?

Deplorables, while politically incorrect, wasn't off the mark. But being politically incorrect is okay for a trump supporter as long as it isn't about them.