Triple Your Money If There's a "Trump Dump" - Keith Fitz-Gerald

As I write this Tuesday afternoon just after market close, investors worldwide have been driving stocks to new all-time highs while ditching U.S. Treasuries and other global bonds based on expectations that President-elect Donald Trump will deliver growth.
That's tantalizing from an investing standpoint, but I see another opportunity that could create jaw-dropping profits.
A short-term tactical trade I'm calling the "Trump Dump."
Here's what you need to know.

The Setup

President-elect Donald Trump had a simple message on the campaign trail – spend, spend, and spend. And that's what the markets are reacting to, now that he's won.
Longer term, there's no question in my mind that you want to be on board.
Not only does President-elect Trump want to rebuild our nation's crumbling infrastructure, but he also wants to take it to world-class standards. Bridges, tunnels, ports, highways, airports, schools… they're all on the list. That means hundreds of millions of dollars headed right into our economy and, hopefully, into your pocket if you're following along.
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More immediately, though, there's something else brewing, and that's what I want to call your attention to today.
A short-term tactical trade I'm calling the "Trump Dump."
To be clear, I am not suggesting the markets are going to crash, nor am I telling you to run for the hills.
Leave that to the alarmists who doom themselves to terrible results by trying to predict the unpredictable. They'll never learn.
What I'm talking about is diversifying your investing strategy by blending the longer-term investment perspective we talk about often with a purely technical, short-term tactical move.
The setup is pretty straightforward based on what I am seeing on my screens.

First, there's a ski jump – meaning prices have jumped sharply higher – at a time when emotions are running higher than normal. That's never a good mix because what goes up, must come down.Second, money is running into the markets recklessly. According to ETF Daily, more than $14 trillion has entered the S&P 500 ETF Trust (NYSE Arca: SPY) since the election, which is a stupidly large amount of money based on nothing more than the fear of missing out, or "FOMO" for short. A $5 billion flow is normally enough to set off my radar, so we're talking nearly three times that here.
And third, momentum has narrowed with each new uptick, yet volatility has fallen by nearly 40% from a VIX reading of 23.01 on Nov. 4 to only 13.72 where it's trading as I type. That tells me new money is becoming pickier while also running out of things to buy.

Seems to me that traders are reaching a point where they're likely to take a breather – a term that can mean any number of things, ranging from a simple pause in buying to profit-taking.
For our purposes, it's a little of both.


Money morning

CBN’s disbursements for development finance hits N732b -By Chijioke Nelson

CBN Governor, Godwin Emefiele

Bankers’ institute reiterates support for banking sector
The actual disbursements for various development financing programme of the Central Bank of Nigeria (CBN), the lender of last resort, has been estimated at N732.2 billion, The Guardian has learnt.
Development Finance involves the supply of funds to various sectors of the economy to promote holistic growth.
Besides, as interest rate rises in efforts to curtail the galloping inflation, with aggregate prices for good and services above two-digit rate in the country, the apex bank said it has always considered small businesses in its decision of development financing, which remains steady at single digit charge.
CBN Governor, Godwin Emefiele, said development banking programme was scripted as a special intervention in critical economic segments to minimise the effects of high interest rates on customers and support growth in the economy.
According to him, the intervention strategy, which started in 1977, with the Agricultural Credit Guarantee Scheme, has since been broadened to power and aviation sectors, with special arrangements for small businesses, under the Micro Small and Medium Enterprises (MSMEs).
So far, CBN has disbursed about N393 billion in 490 projects under the Commercial Agriculture Credit Scheme; N23 billion under the Anchor Borrowers Programme; N79.8 billion under the MSME scheme; and N236.4billion under the Power and Aviation Intervention Fund.
Disclosing these at the 2016 Bankers Dinner in Lagos, at the weekend, the bank chief noted that these schemes, when combined, have created over 6.7 million direct jobs and a lot more indirect ones.
These interventions, which has been increased in recent times due to the challenging economic situation in the country, has also been part of efforts to strengthen import substitution policy, to curb the drain on the nation’s foreign exchange reserves.
Meanwhile, the President of the Chartered Institute of Bankers of Nigeria (CIBN), Prof Segun Ajibola, said that 2016 is awash with mixed feelings both at the global level and the domestic space.
“At the beginning of the year, several projections were made and palpable apprehensions filled the air on the not-too-promising global economic outlook. Some of these projections and apprehensions have been confirmed,” he said.
The don noted that the country has also had its fair share of social and economic challenges in 2016, with stuttering growth, foreign exchange dilemma, inflation, insecurity, militancy and harsh operating environment affecting activities.
“But the regulatory bodies in the banking and finance sector are also rising to the challenges currently facing the country. The Central Bank of Nigeria in a bid to finding optimal solutions to the various economic challenges introduced the flexible exchange rate policy in June, 2016 and came up with other policy pronouncements aimed at returning the country to the path of sustainable growth,” he said.
As a way forward, Emefiele has said that the country cannot ignore the agriculture sector, because it remains the largest employer of labour in Nigeria and contributes about 24.2 percent of our GDP. In addition, a good share of the demand for FX today go directly to importing agricultural produce.
“So, CBN has both a direct and indirect rationale to ensure that this sector is revived in a significant way. We are gratified that the Anchor Borrowers’ Programme, together with other initiatives like the Commercial Agriculture Credit Scheme and NIRSAL, are proving to be successful in several states.
“In Kebbi State, over 78,000 smallholder farmers are now cultivating about 100,000 hectares of rice farms. It is expected that over one million metric tonnes of rice will be produced in that State alone this year,” he said.
Nigeria consumes about 6.1 million tonnes yearly and only produces 2.5 million metric tonnes, but the expected produce will go a long way to make rice available.

“The CBN remains committed to do more in the identified crops such as rice, maize, sorghum, tomatoes, cassava, cocoa, cotton, dairy, and groundnut,” he added. But Ajibola added: “As a major stakeholder in the Nigerian project, CIBN constantly engages with players in the banking industry and other allied sectors to support government and regulatory institutions’ efforts aimed at addressing the current lacklustre performance of the economy.
“We have restructured the synopsis of our conferences, seminars and workshops to focus squarely on pressing social and economic issues. The communiques that proceed from these knowledge event platforms are widely circulated to concerned agencies both in the public and private sectors,” he said.


Culled from Guardian