Stocks Starting to Rise as Trump’s Shutdown Heading Towards End

by James DiGeorgia | 01/25/2019 2:28 PM
Stocks Starting to Rise as Trump’s Shutdown Heading Towards End

Wall Street is likely to fuel a relief rally as shutdown comes to an end.  The Trump administration brags about Chinese concessions, that could end Trump’s trade war and tariff assessments on Chinese imports on everything but steel and aluminum.


By James DiGeorgia

Good news for the Chinese. President Trump desperately needs a win.

The President’s poll numbers have sunk to the lowest approval and highest disapproval levels of his presidency.

Trump understands he has taken an absolute beating from Speaker of the House Nancy Pelosi who has crushed him, and his partial shutdown designed to extort Congress into funding the construction of a wall along the U.S. Mexican border.

Evidence of Trump’s losing the shutdown fight and the escalating pressure on President Donald Trump and GOP lawmakers to end the government shutdown today finally.  Resolved in the short-term deal are:

·        The Aviation Administration halted flights into New York’s LaGuardia Airport because of a shortage of air-traffic control staff.

·        Airports across the country, including Newark and  Philadelphia are also experiencing shutdowns and delay over lack of air traffic controllers; which its union blames on Trump and his shutdown.

·        Growing TSA sickouts, and financially forced walk-offs.

·        FBI Director Christopher Wray, just publicly released a video expressing his anger over the federal government shutdown, while verbalizing his support and empathy for what his employees have to go through, he called the shutdown both “mind-boggling” and “short-sighted.”… “It takes a lot to get me angry, but I’m about as angry as I’ve been in a long, long time.”

President Trump will likely propose a temporarily re-opening the government for three weeks today; while continuing to hint, he intends on declaring a national emergency in an attempt to re-allocate federal monies without congressional approval. Despite the three weekends to the proposal, the president will agree to; the shutdown will be ended permanently. The GOP Senate has had enough of shutdowns, and U.S. courts won’t allow him to re-assign monies without Congressional approval, so at best all President Trump will be able to do is deliver more worthless hyperbole to his core supporters about the construction of the wall.

U.S. investors, professional money managers, are already starting to buy stocks in anticipation of the shutdown-ending especially, with corporate earnings bolstering confidence, in the economy. However, the big winners may be the Chinese.

The president is facing a storm of bad news. Losing the shutdown is just one of the many serious problems he’s facing. Roger Stones’ arrest this morning proves that any hope he had that the Mueller investigation is coming to an end isn’t realistic. Also, the Senate has subpoenaed the President’s former personal attorney and fixer Michael Cohen and the House is about to hit President Trump and his administration with scores of subpoenas. Trump desperately needs something good to happen.

Bottom line: The President has lost. He needs something new to crow about, and he needs it quickly. The best opportunity available to him is to work out the best deal he can with the Chinese, enough of a win to say he extracted concessions no other president has been able to get from the Chinese. By casting an agreement that lifts tariffs on Chinese imports on everything but aluminum and steel, the President can claim a settlement with the Chinese was just the first of many he will eventually reach with them, citing continuing negotiations.

This should send U.S. and Chinese stocks on the run. I expect the Dow Jones to rally 1,500 – 2,000 points. 

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