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FOMO Years

The news Trump has been waiting for is here. Nancy Pelosi has just thrown cold water any thoughts of any near-term impeachment attempt, and Trump supporters are jubilant. Now, the goal of getting re-elected will dominate his Twitter-fed election platform.

And that's good for stocks.

In recent months, Trump 's focus has shifted from dismissing his approval ratings as 'fake news' to cheerleading the stock market. That seems to be his new popularity gauge of choice.

His badgering of the FED and his direct attack on Jerome Powell are a prime example. Just as weakening economic data and tightening financial conditions were prompting Chairman Powell to back off on the brakes, Trump launched his attack. It's inevitable that he will connect the recent market rally to his efforts in getting the Fed to signal a pause.

Talk about jumping out in front of a parade.

Similarly, all signs point to a capitulation on the sticking points in the U.S. - China trade deal by Trump's team. As he regularly over-rides any contrary advice from his staff,

a deal that is deficient in substance is likely. He is pushing the negotiation team to cave, so as not to wreck the stock market rally.

A signed China trade deal will also provide him a major talking point during the upcoming election campaign. When Xi visits Mar-a-Lago it will be a publicity home run for the Trump administration, one that he needs desperately after the embarrassing North Korean talks.

The resultant reflation in global growth is sure to be a major tailwind for the Republican efforts in 2020. The global soft landing that is currently being signaled by many forward looking indicators will coincide with the removal of trade uncertainties that have impeded investment plans, furthering the recovery.

It will also provide another parade for Trump to front run. Market bears are becoming very frustrated by the pro-growth president. With a docile FED and no tough love on fiscal restraint, the path of least resistance is still up for risk assets.

The markets tired from their "V" shaped recovery, but refusing to correct. Yesterday's action showed that the smallest of dips will be bought.

The FOMO party is alive and well, and TINA is serving the drinks. And Trump certainly won't do anything to stop the celebration.

Risk Model: 4/5 - Risk On

Only an overbought RSI is showing any caution in the model. As I discussed last week, the elevated AAII Bull/Bear ratio has come down, but remains bullish.

Copper is acting well, mirroring the spectacular rally in Chinese stocks. The command and control aspect of the China economic system seems to include stocks too.

Shanghai Stock Market

Copper


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