President-Elect Trump trades

[Spekulatius]

2 hours ago, backtothebeach said:

Interesting that DG and DLTR also suffered today.

If your business is importing cheap Chinese goods or even just any foreign ones, you are not a Trump trade winner. TGT also down. Retail is not the place to be.

 

Housing stocks also down due to higher interest rates.

.

[Red Lion]

It seems like maybe the homebuilders continue to be a good opportunity here. Assuming these market assumptions about interest rates hold, it feels like we would likely continue to have suppressed supply of inventory, low affordability, high replacement costs, etc. etc. These same tailwinds that have benefited the homebuilders over the last couple years would seem to still apply. 

[gfp]

19 minutes ago, Red Lion said:

It seems like maybe the homebuilders continue to be a good opportunity here. Assuming these market assumptions about interest rates hold, it feels like we would likely continue to have suppressed supply of inventory, low affordability, high replacement costs, etc. etc. These same tailwinds that have benefited the homebuilders over the last couple years would seem to still apply. 

but who’s gonna build the houses?

[Red Lion]

3 minutes ago, gfp said:

but who’s gonna build the houses?

Fair point. 

[sleepydragon]

10 minutes ago, gfp said:

but who’s gonna build the houses?

[Spooky]

We're all probably better off not letting partisanship affect our portfolio investment decisions. The latest JPM Eye on the Market was interesting, there is a section discussing this issue and a Trump victory: https://am.jpmorgan.com/content/dam/jpm-am-aem/global/en/insights/eye-on-the-market/kamilton-amv.pdf

[gfp]

So Jay Powell just said several times that he wasn't going anywhere until May 2026 - I thought that was pretty interesting!   

[Spooky]

26 minutes ago, gfp said:

So Jay Powell just said several times that he wasn't going anywhere until May 2026 - I thought that was pretty interesting!   

 

Interesting. Wonder how fast until Trump tries to fire him! I've been reading Trillion Dollar Triage and there were some run-ins between Trump and the Fed in his prior term.

 

[gfp]

Trillion dollar Triage is a great book.  Don't think J.Pow is going anywhere!  This will be entertaining at the very least.

[Spooky]

43 minutes ago, gfp said:

Trillion dollar Triage is a great book.  Don't think J.Pow is going anywhere!  This will be entertaining at the very least.

 

[gfp]

So this has me thinking - what can Trump do to influence interest rates while he waits for Powell's term to expire.  He can instruct his treasury secretary to starve the market of longer term paper - concentrating even more of the government's borrowing in bills.  Hmmm

[Munger_Disciple]

11 minutes ago, gfp said:

So this has me thinking - what can Trump do to influence interest rates while he waits for Powell's term to expire.  He can instruct his treasury secretary to starve the market of longer term paper - concentrating even more of the government's borrowing in bills.  Hmmm

 

 

Can it potentially lead to a weaker dollar or higher inflation? If it is just weaker dollar, I suppose Trump may like it. But inflation would be a real problem for him. 

[Blake Hampton]

1 hour ago, gfp said:

So this has me thinking - what can Trump do to influence interest rates while he waits for Powell's term to expire.  He can instruct his treasury secretary to starve the market of longer term paper - concentrating even more of the government's borrowing in bills.  Hmmm

 

Our country is doomed

Edited Thursday at 11:26 PM by Blake Hampton

[Spekulatius]

Trump is going to make volatility great again.

[TwoCitiesCapital]

3 hours ago, gfp said:

So this has me thinking - what can Trump do to influence interest rates while he waits for Powell's term to expire.  He can instruct his treasury secretary to starve the market of longer term paper - concentrating even more of the government's borrowing in bills.  Hmmm

 

Starving the market of duration probably does lower interest rates a hair - but if Powell keeps the curve inverted, or refuses to cut, doesn't that still simply raise Trump's borrowing costs? 

[gfp]

2 minutes ago, TwoCitiesCapital said:

 

Starving the market of duration probably does lower interest rates a hair - but if Powell keeps the curve inverted, or refuses to cut, doesn't that still simply raise Trump's borrowing costs? 

 

Imagine that - stimulating with lower long rates while simultaneously stimulating by pouring interest income into the private sector.  Too bad commercial real estate loans are tied to the prime rate / sofr.

[TwoCitiesCapital]

I don't believe higher short rates are stimulative to a society of net spenders with little savings. 

 

It's weird to believe lower long rates are stimulative while simultaneously believing higher short rates do the same. 

[gfp]

17 minutes ago, TwoCitiesCapital said:

I don't believe higher short rates are stimulative to a society of net spenders with little savings. 

 

It's weird to believe lower long rates are stimulative while simultaneously believing higher short rates do the same. 

 

Just ask Warren Buffett

[SafetyinNumbers]

I’m hearing from a shareholder who has a large position in Fairfax India that it’s rallying because Indians in America think that India will benefit from the close relationship that Trump and Modi appear to have.

It’s been basing for a while so might just be a coincidence. The IPO of Anchorage is also expected over the next 10 months but it’s not guaranteed.

 

[dealraker]

19 hours ago, Red Lion said:

It seems like maybe the homebuilders continue to be a good opportunity here. Assuming these market assumptions about interest rates hold, it feels like we would likely continue to have suppressed supply of inventory, low affordability, high replacement costs, etc. etc. These same tailwinds that have benefited the homebuilders over the last couple years would seem to still apply. 

All depends on the 20% illegals working construction...up to 50% in the booming markets...

Was it another saggy jowl bark and with no bite?  We got 20% working age male disability here in my parts.  Not sure these legals wanna work but they do vote red.

 

I just put a long concrete drive into the land across the street from my lake house.  $75,000 total.  Was asked and obliged - to pay a bunch of the workers with cash for some reason.

 

How would I have gotten that job done without this bunch?  I'd have had to do it myself...but I'm too old.  Could I have had it done for twice the price not paying cash?  Zero chance of that happening.  Ain't nobody available.  

 

[gfp]

12 hours ago, SafetyinNumbers said:

I’m hearing from a shareholder who has a large position in Fairfax India that it’s rallying because Indians in America think that India will benefit from the close relationship that Trump and Modi appear to have.

It’s been basing for a while so might just be a coincidence. The IPO of Anchorage is also expected over the next 10 months but it’s not guaranteed.

 

 

That sounds plausible.  The shares are very illiquid so any new interest that isn't willing to chip away a few hundred shares at a time is going to move the price abruptly - especially market orders on the open!

 

Trump and Modi get along and Trump is less likely to call out Modi for his less-desirable traits.  Anything more threatening to China probably helps India as a primary beneficiary of diversifying away from China - that is probably also a big factor.

 

Kempegowda airport numbers have been coming out gangbusters - coming back faster than other top airports in India.  It appears that the 2nd Bengaluru airport will need to start development before the first one's exclusivity period ends - which makes it very likely that Anchorage or BIAL or whatever is the developer and operator of the 2nd airport as well.

[yesman182]

Any chance we see a new pipeline to Canada's oil sands with trumps "drill-baby-drill" mindset?

Edited Friday at 02:56 PM by yesman182

[Red Lion]

2 hours ago, dealraker said:

All depends on the 20% illegals working construction...up to 50% in the booming markets...

Was it another saggy jowl bark and with no bite?  We got 20% working age male disability here in my parts.  Not sure these legals wanna work but they do vote red.

 

I just put a long concrete drive into the land across the street from my lake house.  $75,000 total.  Was asked and obliged - to pay a bunch of the workers with cash for some reason.

 

How would I have gotten that job done without this bunch?  I'd have had to do it myself...but I'm too old.  Could I have had it done for twice the price not paying cash?  Zero chance of that happening.  Ain't nobody available.  

 

 

Well if it's like the last administration (or the Obama administration for that matter), they probably wait until someone gets arrested for a crime first by local authorities before placing an immigration hold and beginning deportation proceedings. But if the construction labor situation gets any worse, that could be a really bad thing. 

 

Still, as far as homebuilders are concerned, don't you think the big players will be the ones to get labor while all the mom and pop real estate investors and home renovations types get frozen out of the market? I guess there's no reason to speculate, we will probably know in a few months how everything unfolds. 

[dealraker]

20 minutes ago, Red Lion said:

 

Well if it's like the last administration (or the Obama administration for that matter), they probably wait until someone gets arrested for a crime first by local authorities before placing an immigration hold and beginning deportation proceedings. But if the construction labor situation gets any worse, that could be a really bad thing. 

 

Still, as far as homebuilders are concerned, don't you think the big players will be the ones to get labor while all the mom and pop real estate investors and home renovations types get frozen out of the market? I guess there's no reason to speculate, we will probably know in a few months how everything unfolds. 

Big players subs are precisely where the illegals are a large percent.

[thowed]

@dealraker Thanks for the reality check.  In the UK, Brexit is an example - it has been a nightmare finding decent tradespeople for building etc. though arguably this is not because there's been much success in getting rid of immigrants, and possibly more that skilled immigrants find it less attractive being in a country where the economy is stuck e.g. the Poles have been going home where business seems better (also, ironically given 2011, the Greek economy is also pumping!).

 

People don't like immigrants, until they've gone, and people realise what they were doing.