Mid-week market update: Investors have seen this movie before, which I described as a Trump collar. As the accompanying chart of the trade war factor, Trump shown a pain point at which the market anxiety, as measured by the VIX and MOVE Index, rises enough that he moderates his course on tariff belligerence. As market anxiety cools down, and he makes some gains to score political capital, the Tariff Man emerges and he asserts his "Art of the Deal" persona. In the wake of the trade deal with Vietnam and the passage of the tax bill, we are back in the Tariff Man zone.
In effect, he is financing the Trump TACO Put with the sale of a Trump Tariff Man Call option on risk assets. It's therefore not a surprise that the market is pausing its gains this week.
The full post can be found here.
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