Steno Signals #182 - Cutting Through the Trump Noise: A Massive Uniform Move Is Happening

There are (and will be) Trump/China headlines right, left and centre over the coming weeks. Trading macro is therefore all about being right on the core underlying macro trends and cut out the noise

Happy Sunday, and welcome to my weekly editorial on everything macro and markets (we had some technical issues yesterday, so sorry about the delayed delivery)

We are now at the final innings of the inauguration week, and oh boy did it surprise and entertain right about everyone (including me). From full-blown tariffs from the get-go being the base case, a Trump meme coin being launched into the week and a government sponsored Bitcoin reserve (or at least a clear reference to the crypto space during his first week) to barely any mentioning of crypto, no immediate tariffs on China and very accommodative policies on the fiscal side, which makes the 3% deficit target proposed by Scott Bessent look unrealistic at best. Our base case is that Trump will likely try to negotiate trade terms on Semis / tech with China in exchange for TikTok to be allowed in the US (with US ownership).

From the outside, it clearly looks like Trump has to some extent used the Tech / Crypto community as a spring board to gain popularity, and that he is now slowly but surely returning to more classic policies to please the traditional MAGA crowd. Vivek has been removed from the administration, and Trump’s chief of staff has plans of limiting Elon’s access to Trump already from the start.

While his policy-mix has ended up being very favorable for risk assets, as Trump has not been as inflationary as was feared by the broad market while supporting further fiscal spending (urging OPEC to cut prices etc.), Trump as a very pro-crypto president is still yet to be seen, and we have seen the ramifications in the Trump coin already, which has been slow bleeding ever since his inauguration speech.

Chart of the week: Bye bye Trump coin