Is This How the Trump Trade Ends?
Ah, the good ol’ days… Most folks remember the Reagan years as a golden age for America. The Keynesian economics that had dominated since the Great Depression gave way to freer markets. And swashbuckling capitalism made a comeback. Reagan slashed regulations… cut taxes… and the stock market boomed. And over his two terms, the S&P 500 rose by about 120%. But what most folks don’t remember is that it started rough. Within six months of Reagan taking office, the U.S. economy plunged into a deep recession. The jobless rate rose to 11%. That’s higher than at any point during the 2008-09 Great Financial Crisis. Meanwhile, the Fed – under its cigar-chomping chairman Paul Volcker – kept rates punishingly high to curb inflation, which had been a persistent problem in the 1970s. In 1981, the year Reagan was first inaugurated, the federal funds rate reached 20% – an all-time high. And the S&P 500 was down by 14% after his first 12 months in office. But why am I reminiscing with you about this now? There’s a lot of excitement about Donald Trump’s second term. A lot of it is justified. Trump – like Reagan – promises to cut red tape and set capitalism free. But that doesn’t mean the stock market will boom from now until his last day in office. As we’ll explore today, Trump’s first years in office could look a lot like Reagan’s. We could get a dip in stocks… before they start to climb higher again. So, you need to prepare with the right strategy, like the one I’ll introduce you to in just a moment. First, let’s look at some of the market headwinds under Trump 2.0. High Tariffs = High Inflation Trump differs from Reagan in one clear way… The Teflon President was a strong advocate of free trade. In 1986, he launched trade negotiations with 123 countries – the largest of its kind in history. This led to the creation of the World Trade Organization (WTO) and lowered global tariffs. And in 1988, he won approval for the U.S.-Canada Free Trade Agreement, which laid the groundwork for the North American Free Trade Agreement (NAFTA). He also reduced tariffs on a wide variety of industrial goods. Trump, on the other hand, promises to increase tariffs. These include… - A 10% tariff on all imports to encourage domestic production and reduce reliance on foreign goods
- A minimum 60% tariff on Chinese goods
- A 200% tariff on Mexican cars
- A 100% tariff on cars manufactured in other countries outside the U.S.
- Reciprocal tariffs on any country that levies tariffs on U.S. goods
You may agree with tariffs to punish China and other countries for unfair trade practices. But those tariffs could cause inflation to roar back to life. Tariffs are taxes on imports. This raises the cost of goods brought into the country. Companies often pass these costs along to consumers in the form of higher prices. So, ultimately, tariffs are a tax on us. It’s possible that Trump is floating high tariffs as a negotiating tool… and that tariffs will end up being much lower. But if we do see high tariffs… and the inflation genie bursts back out of the bottle… it’s hard to see the stock market continuing its ascent. And there’s another headwind for the market. One that has nothing to do with the incoming president. The stock market is eye-wateringly expensive right now. | Recommended Link | | | | Over the last 20 years, we’ve experienced the biggest bull-market in history. And yet, JP Morgan reports the typical investor has only earned about 2.9% a year, barely beating inflation. Fortunately, there is an alternative. In fact, thanks to a powerful scientific-phenomenon known as the “Magic Pattern,” millionaire-trader Jeff Clark has delivered over 1,000 winning trade recommendations making him a “go to” advisor for America’s wealthy. Today, Jeff is tracking a handful of niche-sector trades he believes could surge 227%, 333%, even 490% in the next 30 days. Go here now for the full story. |  | | Trillion-Dollar Giants Look at the Magnificent Seven stocks that dominate the headlines. 
All seven are worth more than $1 trillion each. Three are worth more than $3 trillion each. At current valuations, Apple, Nvidia, and Microsoft are each worth more than 10% of America’s annual GDP. Not even John D. Rockefeller’s Standard Oil was worth anywhere near that much. And it had an effective monopoly on the U.S. oil-and-gas industry. Is it realistic to expect these Big Tech companies to each be worth 20%, 30%, or 40% of the country’s entire annual economic output? What would that look like? Where would the money come from to push valuations that high? These Magnificent Seven stocks are also pricey relative to their earnings. Take Microsoft. It trades at 34 times last year’s earnings and 12 times last year’s sales. This is a wildly profitable company. It should trade at a premium valuation. But 12 times sales? Last time Microsoft traded that high versus sales was during the dot-com bubble in the 1990s. In the crash that followed, it plunged as much as 66%. So What Should You Do? This doesn’t mean you should sell everything and sit in cash and gold. Trump, like Reagan, may have a few bumpy years. But the long-term case for stocks is bright – especially if he cuts regulations and taxes. Still, with valuations at these levels, it makes sense to set aside a portion of your portfolio – say 10% – for trading opportunities. This allows you to take advantage of short-term market moves – to the upside and the downside. That’s the approach we take in our premium advisory, Freeport Alpha. And it’s been working well. For instance, back in September, we closed out an options trade on natural gas producer EQT at a gain of 100% in just over a month. And immediately following the election, we booked 127% profits on an options position in public prison operator CoreCivic. We were in that trade for just eight days. Those trades came from friend of The Freeport Society Jonathan Rose. If you don’t already know him, he’s been a professional trader for 27 years – including stints as a floor trader on the Chicago Mercantile Exchange and a partner in a proprietary trading firm. These days he heads up Masters in Trading, where he uses his experience to help regular folks master the art of trading stocks, options, and crypto. And I’m delighted to hear he’s developed a new trading strategy– one that relies on a new type of trading tool that delivers ultra-fast profits. He’s designed it to work in up markets and down markets, which is exactly what we need. | Recommended Link | | | | While Wall Street is busy reacting to every headline, they’re missing the real story… The imminent arrival of Artificial General Intelligence (AGI). AGI is a tsunami that will reshape everything. And Elon Musk predicts we could be co-existing with it by the end of this year. Get a three-part blueprint to future-proof your finances PLUS a brand-new $3 stock idea tailored for the AGI era. Details here… |  | | “Trading Dynamite” Using this system, he’s given his readers the chance to close out 14 short-term trades with gains of more than 100%… and some longer-term trades with even higher gains. These include a 245% return on online advertising stock Criteo and a 177% return on uranium miner Cameco. And on Tuesday, he hosted a special edition of his live Masters in Trading training to show folks how it works and how to use it. But a word of warning… The trading tool that Jonathan is using for his new strategy is controversial. So much so that Bloomberg described it as “trading dynamite.” Jonathan and other professional traders use it to capture triple-digit gains in less than 24 hours. It can also deliver big losses, if you don’t use them with the right strategy. But Jonathan hasn’t thrived as a professional trader for nearly three decades by taking unnecessary risks… or gambling on overly speculative strategies. That’s why I urge you to watch the replay of his One-Day Winners Live Summit. It’s an eye-opener – even if you don’t intend to trade this market and instead just pursue a buy-and-hold strategy to profit in the Trump years. To watch the video, just follow this link. To life, liberty and the pursuit of wealth, | 
