Beyond the "Trump Trade", which is as much bluster and mis-direction as his tweets (meant to take our focus off of the real issues), there are more important near-term questions:
1) OPEC meets on Wednesday (Nov. 30) and whether or not a meaningful production cut can be achieved will be a significant hurdle and oil prices will be impacted (one way or the other).
2) US Employment Situation Report is on Friday (Dec. 2): our focus is (and has been) on the current unemployment data (now at 4.9%) and the 3 year moving average (5.6%) and how when these numbers have converged in the past it has indicated recessions. With little change in the unemployment rate and a falling 3 year moving average, this convergence is happening rather quickly. An uptick in the current unemployment rate (more workers looking for jobs) may signal that (with this indicator) a recession may not be far behind. Whether or not Trump can provide economic stimulus is not going to be an issue in this case, because the impact of that would not be felt until well into 2017 (reason why equity and perhaps bond markets have got way ahead of themselves).
3) In what could be a very important moment for the future of the Euro, Italy votes on constitutional reform on Sunday (Dec.4). Prime Minister Renzi has indicated that if a "no" vote wins, he will resign and once again Italy will be thrown into political chaos and it is likely an election will follow. This may give the "populist" parties (who want to hold a referendum on the Euro) an opportunity to move into power. This is at a time when banking issues in Italy are already problematic and could create even more financial market chaos.
Next Week: Central Banks start to take the stage.
Scott Tomenson,CIM Managing Partner, Chief Investment Strategist