‘Trump trade’ starts to fade as presidential approval goes out of fashion
New York — "Trump trade" is so last-season. The market’s attention to US President Donald Trump’s policy agenda has faded since September even as more traditional factors, such as macro-economic data, remain a driving force, Goldman Sachs Group economists Charles Himmelberg and James Weldon wrote in a note on Thursday. Earlier in the year, 10-year US treasury yields "appeared to display a significant beta to presidential approval ratings", they said, noting that the dollar and US equities exposed to proposed corporate tax changes showed similar patterns. This relationship has faded in recent months, "consistent with a shift in market focus away from crude indicators [such as presidential approval]". The divergence occurred in September amid improvements in the macro-economic outlook, Trump’s agreement to work with Democrats, and a turning point for the legislative calendar as fiscal deadlines cleared, among other things, according to the note. This doesn’t mean markets have gotten a...
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