Trump Tactics Spell Trouble
Perhaps he is just "poking the bear" as part of his skillful art of negotiation (remember Trump University?), but even before taking the helm (Commander In Chief), the president-elect is picking fights.
His latest Twitter tirade ( lashing out at China) may be a glimpse into what to expect in the years to come and the word diplomacy doesn't much seem to be factored in.
China's response via an op-ed in the Peoples Daily (the Communist Party Newspaper):
Op-Ed: Trump's irrational China bashing shows his ignorance of China
and it suggested the option of "retaliation" if necessary and that "Not only is the US more dependent on China than Trump seems to realize, but world peace and prosperity depend on a healthy develop of China-US relations. Trump needs to get the China-US relationship right."
The difficulty here is that the word "apology" is not in a narcissist dictionary (believe me, I have had the experience). That could provide some challenges for Trump's relationships on the global stage. For a person used to getting his way because he could force it or "scam it" (read: http://www.nytimes.com/2016/12/05/opinion/the-art-of-the-scam.html?smid=tw-nytimes&smtyp=cur&_r=0 ), this is a bit of a different situation.
And, according to Bloomberg, a client survey by forecasting firm Oxford Economics:
suggests that Trump's future policy stance poses " the single largest risk to the global economy".
"More than half of respondents said that the probability of a sharp slowdown has increased..."
As I said yesterday, if stock markets believe that reduced taxes and increased spending (if and when it all comes to fruition sometime in 2017/2018) are beneficial, they will have to come to grips with the fact that earnings are a function of revenues that are generated by sales. This may pose some serious difficulty as far as finding growing markets to sell into if the US goes about alienating itself from the rest of the world.
We will talk about this and other developments in financial markets and the global economy on our weekly client webinar today. We will post the recorded version at or about 5pm EST on our website: http://highrockcapital.ca/current-edition-of-the-weekly-webinar.html
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