MARKET CALL: The Best Trump Trade

So far among the best Trump trades has been to short the S&P 500 since February 19 through last Thursday (chart). It fell 10.1% over this period. Let's call it the "Trump Thump." We aren't convinced that the correction is over despite Friday's rally and extremely bearish sentiment readings, which tend to be bullish from a contrarian perspective. In the past, such readings often elicited a Fed-Put easing response. That's not likely on Wednesday after the FOMC meets and Fed Chair Jerome Powell holds his presser. He is likely to reiterate that the Fed is in no hurry to lower interest rates.

Stock futures are down a bit this evening after Treasury Secretary Scott Bessent said this morning that there are "no guarantees" that there won't be a recession. On the other hand, he boldly guaranteed that there won't be a financial crisis. (Jinx?) So there won't be a Trump Put either. Then again, there should be a rebound in February's retail sales, to be reported tomorrow morning, though it might have been muted by the second month in a row of colder-than-average weather. We will feel better about calling a stock market bottom when the market is no longer "tarrified" by Trump's tariff threats and actions. It might bottom after April 2, when Trump imposes reciprocal tariffs all around the world, if they lead to tariff-reduction negotiations.