President Trump just unveiled another massive TACO.
The term “TACO” is an acronym for “Trump Always Chickens Out.” It implies that the President, for all his bluster and verbal aggression, is in fact quite opposed to conflict, especially if it hurts the stock market.
Earlier today, President Trump tweeted the following:
Stocks immediately ignited higher. As I write this, the S&P 500 is up 2.4%, the NASDAQ is up 2.6% and the Russell 2000 is up 3.8%. Stocks had been in VERY serious trouble late last week, so this announcement from the President is a welcome relief!
It was also extremely expected.
From a technical analysis perspective, the S&P 500 had broken below the all-important 200-day simple moving average. This is THE long-term bull market trendline for stocks. So the odds greatly favored an intervention by the President.
How will this play out from a geopolitical perspective? I have no idea. The President changes his stance on Iran on a weekly basis. And frankly, there are only a few dozen people in the world who have access to the real information concerning what is taking place geopolitically. Everyone else is reacting to rumor, fiction, or worse, misinformation that is intentionally leaked for strategic purposes.
What IS clear is that the energy disruptions have the potential to unleash another round of inflation… and the markets know it: 12month inflation expectations just exploded higher to 5.2%!
