12 October 2017: The Five Trillion Dollar Man 

US President Donald Trump was interviewed on a wide range of topics on Fox News yesterday. The interview touched on the subject of Wall Street’s big gains this year. Donald Trump took full credit for these gains and was ‘very happy’ about them. Referring to the Obama administrations he stated: “So they borrowed more than $10 trillion, right? And yet, we picked up $5.2 trillion just in the stock market. Possibly picked up the whole thing in the first nine months, in terms of value. So you could say, in one sense, we’re really increasing values. And maybe in a sense we’re reducing debt. But we’re very honored by it.” One issue is that it is unclear how national debt is related to increases in the stock market. Another one is how Donald Trump will react at the moment US stock markets suffer considerable losses. The latter scenario is not very unlikely, given the natural rhythm of stock market fluctuations and the fact that national banks are on a trajectory of making borrowing money more expensive. Ah well, we guess that will be Donald Trump’s reaction: in case of lowering stock prices, the national banks are the ones to blame.

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Investors were happy with the minutes from a Federal Reserve’s policy-setting gathering in September that were presented yesterday. These minutes indicate that most Fed policy members want to tread carefully by increasing rates one additional time despite stubbornly low inflation. All major US indices closed at record highs. Both the Dow and the S&P 500 rose 0.18%, while the technology-heavy NASDAQ climbed 0.25%. Volatility eased and the VIX is back in single digits territory. The fear index lost more than 2% and closed at 9.85 points. UVXY ETFs suffered a considerable loss and closed more than 4% lower. XIV ETNs recorded a gain of almost 2%.
Danny Daredevil is waiting for a shift in sentiment: his RSS dropped to 21%. Adventurous Anny is still holding cash. Her RSS remained at 9%. Solid Suzy and Lazy Larry keep partying: their RSS rose to 58%.
None of our models gave a trading signal at the end of yesterday’s session.

Model  Holds Start date

RSS

YTD

QTD

AAR

Danny Daredevil UVXY 1 January 2016

20.89%

-70.01%

-13.23%

11%

Adventurous Anny Cash 6 March 2017

9.22%

9.22%

0.67%

16%

Solid Suzy XIV 6 March 2017

57.59%

57.59%

7.73%

113%

Lazy Larry
XIV 6 March 2017

57.59%

57.59%

7.73%

113%

RSS = Return Since Start | YTD = Year-To-Date | QTD = Quarter-To-Date | AAR = Average Annual Return

 

A one-minute strip generator production

Created with the help of stripgenerator.com and a corny mood…

Picture of Donald Trump: still from interview on Fox News