Trump’s trade war impact on consumer confidence in USA

The confidence of US consumers in the economic development of the country declined in July to a six-month low - primarily because of concerns about new customs tariffs on imports of goods into the United States. The US consumer confidence index fell to 97.1 points in July from 98.2 points in June, with a median forecast in the financial markets for a much modest decline to 98.0 points, the lowest level of the January index here.

Despite the surprising deterioration the July index level remained close to the average of 97.7 in the previous twelve months and is still 4% above the year-ago rate thanks to robust job growth employment and very low unemployment.

So far, job and income growth has been able to offset higher inflation and interest rates. However, the clouds on the horizon are due to growing concerns about the potential negative impact of customs tariffs on the national economy. Fears of the negative impact of high tariffs have increased recently, rising from 15%, according to surveyed Americans in May, to 21% in June and to 38% in July. The consumer expectations index for future economic activity improved slightly to 86.4 points from 86.3 points a month earlier, while the index defining the current US consumer rating for the country's economic conditions fell sharply in July to 113.9 points from 116.5 points in June.

The diagnosis of a single-neuron mutant

I have long wondered whether Donald J. Trump suffers from paranoid schizophrenia or malignant narcissism or he owns the best qualities of both.

People with paranoid delusions are unreasonably suspicious of others. This can make it hard for them to hold a job, run errands and even to appoint and cancel several times a meeting with the president of any country word wild. 

On the other hand, the malignant narcissists act as they think they need to act to get what they want. If you confront them with their lies, they simply repeat until true. And they will say anything they want. And it’s proved many time, there is no need to extract examples now.

But the Trump’s pathology is mush more complicated.

And here from it comes:

He is being particularly intelligent or bright or practical or disciplined and never had actually worked at a real job He is not making rational and logical decisions and has no patience or aptitude for reading or absorbing information.

Raised by a racist father who was an absolutely unscrupulous businessman, who would resort to anything and hurt anyone just to make a buck, a father who alternately indulged and pressured him to succeed.

He is showing an extreme need for obeisance.

He was put  in top schools without meriting the placement or having to put in a lick of work at said schools.

Got a lot of media attention over the years and was convinced that he can easily make a silk purse out of a sow’s ear, as the saying goes, when it comes to concealing his business failures.

During lots of years he avoided the prosecution for not paying employees, breaking contracts, frauds, suspicious movement of funds and so on.

He had an utter contempt for just about everyone, especially women, as far inferior to him, and that he can adeptly manipulate and deceive them.

He is showing deep and inside  contempt against the poor people, the middle class and anyone of colour or any identifiable ethnic or religious group.

He is not  caring if his supporters are white supremacists or thugs, as long as he receives what he wants.

And last but not least he is not giving a shit what happens to anyone - especially the United States.

As you see the pathology is too complicated to be defined. In my opinion we have lots of physical and neurological signs of both diagnosis, but which is dominating? Or we have a brand new clinical diagnosis?Bad witch. New world. New times. Mutation. Feels alright.

AUD/JPY Vulnerable on trade war

In true Trumpian style today the trade war was refreshed with several bew tweets concerning this time the Harley Davidson company, which has shifted some of its production overseas as a result of increased duties. In the forex market the most vulnerable currency pair in global trade concerns and risk appetite is AUD/JPY. 

During the last four months the pair is developing with a range between 84.50 and 80.50 and yet is finding stong resistance and respectively support at these levels. On the four hour time frame the price is developing below its moving averages which are merging around 82.50 and are proving immediate resistance. RSI has lost directional strength around 40. Stochastic retreated from its overbought territory and is showing storng bearish momentum.

When the markets become more influenced by the trade war and thematerial impact on global economic growth, then the pair might breach the bottom boundary of the current range which will lead bears to the long term support line at 76.00. But if the spirits calm down the AUD/JPY pair migt try to break the upper boundary of same range and next bullish target around the long-term resistance at 89.00. 

USD/JPY At the upper side of its range on higher US Treasury yields

The US President Donald Trump is feeling enthusiastic about Taylor and the expectations for the next Fed’s rate hike rose after Janet Yellen’s comments during the weekend.  Following these events yesterday  the US Treasury yields skyrocketed to highest level since November 2008.
Today the USD/JPY is backed up the extended advance on the US Treasury yields and is trading at the upper side of its range.
Thechnically speaking seems that the pair has not enough stregth to climb significanlly higher. On the four hour time frame the price has topped at the 100-day SMA, acting as a dynamic resistance at 112.46, which is also the daily high. The pair couldn’t cross to above the 100-day SMA , but meanwhile remains above the 20-day SMA, that is staying flat around 112.00 and is providing first support level. Stochastic has turned sharply to south, but yet remains within extreme overbought territory. RSI also retreated from the north area and eased around it mid-line.
Nevertheless I’m positive on further advance for the pair , but first bulls should conquer the October 6th’s high at 113.43.  

Trumpalyize this

The very first excecutive order of the President Donald Trump hit like a wrecking ball the healthcare walls of stability and galvanized the public disapproval. Inadequate, reckless or just to confirm that this man is redefining weird on an hourly basis.

With no Republican replacement for the Affordable Care Act seen ahead, every step taken to destabilise the individual insurance market and Medicaid risks weakening of the health-care system in need of reinforcement.

People are discouraged of buying insurance, particularly healthy people who need to balance the risk bets and to keep their premiums reasonable.

Next to creep with troubles is The Justice Department by cutting the government’s defence against a congressional lawsuit that intends to stop some $7 bln in federal “cost-sharing” payments to insurers.

The president’s doings are going to flay his voters alive and he is not taking into consideration that needs healthy people to feed his flame. 

If the responsibility to strengthen the system has not been approached with the fundamental significance, then a prescription for self heath care is absolutely obligatory. Trumpalize this with your psychotherapist.

Golden Bulls Yet Among The Market

The US dollar’s strengthening, the expected interest rates hike and the lower risk and volatility in stock markets are most important factors that are driving gold prices down. The exposed Trump’s program for boosting the GDP definitely will lead to rising interest rates and stronger US dollar, which is attracting for investors. Hence this is bullish for the dollar, gold is going to suffer. 

But in case we are having long term interest rates increase, this does not always mean that we will have falling prices in gold. According to the World Gold Council the average gold returns were positive as long as interest rates increased gradually and didn’t reach extremely high levels - over 4%. Some economists have shared the opinion that during Trump’s presidency a recession will be a fact, because the current expansion on stock markets is taking too long time. In this common, the investors in gold mining companies should consider this and take steps for profit taking, but instead of this the observation is that they keep their investments for a longer term. 

And while we are witnessing the brutal post election sell-off, shall we abandon all things gold?

In fact the post elections fever dumped the gold hedges  and the gold suffered huge drop for the last 3 weeks. Obsessed by the fear of the unexpected, traders generated enormous sell offs and couldn’t think deeper over the market situation. If looking inside the gold stocks’ fundamentals there might be found an amazing way to fight the prevailing fear. 

The gold miners just released their third-quarter results, which proved very impressive. I suggest you to look at the below GDX Component Comapnies’ Fundamentals Q3’2016 table.  Lower costs and higher gold prices usually lead to surging operating cash flows and profits and the gold miners’ fundamentals are stronger now. So golden bulls are still among the market.