For the uninitiated the above headline from CNBC’s “On the Money” segment last Friday could be an “OMG! What’s happening now?” moment. It is clearly designed to do what it did — grab the viewer’s attention. However, when commentators talk about the misrepresentation and obfuscation emanating from the White House, the folks in the administration have nothing on the headline writers over at CNBC.
The headline comes from an interview with J. P. Morgan Asset Management’s chief global strategist David Kelly. Kelly said that the increase in volatility on the heels of the appointment of a special prosecutor came a as bit of a surprise to him. He did not say it “may ‘change the odds’ for Wall Street, and your retirement.” He did say:
“But if we get more revelations or more reaction from the administration, that sort of changes the odds, and there could be more volatility.” He did not recommend that anyone change their asset allocation or investment strategy except for a recommendation that one might add to foreign equity exposure … pretty benign stuff versus their headline. And it is a shameful spinning of the Kelly’s commentary. Look at the article. Listen to the interview. See for yourself. There is nothing here.
The Trump Trade
For those who still believe that the Trump Trade and realization of the Trump agenda is the key factor behind the market’s recent success, I beg to differ. The Trump Trade, I believe, is (has been and will be) a dead issue until Donald Trump changes (which I don’t see as a realistic possibility), the drip, drip of the investigation leakage ends or Mr. Trump leaves office. These distractions make it very hard for any real progress on tax reform or infrastructure. As such, most players (except the sellers last Wednesday) figured this out months ago. My bottom line is that the market’s resilience is more about improving corporate earnings, global synchronized economic improvement and the one thing Trump could effect, regulation … all of this with a backdrop of low inflation and interest rates. It appears that most of the on-air personnel and pundits appearing on CNBC have not picked up on this concept yet.
Importantly, this is why most institutional trading rooms have CNBC running all day on their monitors with the volume muted. The pros use it for breaking news alerts rather than interpretation and analysis, which from CNBC is usually worthless. Long-term investors should not pay attention at all!
What’s your take?
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