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Surveillance: Forecasts Have to Be Nimble With Trump's Unknowns

bloomberg-surveillance-podcast economics-business-work Apr 11, 2026 source →
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136
Domain
economics-business-work
Reading time
10 min
Record
Surveillance: Forecasts Have to Be Nimble With Trump's Unkno

Claims from this story

Every atomic assertion extracted from the underlying record, ranked by evidence strength.

Reality makes a president, not the president making reality.

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Russia is a weak country carrying out a brilliant bluff.

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Correlations among stocks in the S&P are at their lowest in about 10 years.

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The breakout in J.P. Morgan is considered the most important chart of 2016.

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Economists are worried that markets are trading like it's a new day, and if that doesn't come, the economy is left with a slowing trajectory.

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This can stretch the consumer cycle longer because they have more cushion to absorb a faster economy with higher interest rates or a softening economy.

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The unknown unknown for 2017 is what happens on trade policy and how far it will be pushed.

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Lower correlations are often consistent with a supportive credit environment.

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Investors were not distinguishing among stocks during past correlation spikes, treating them as an asset class.

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Investors have put $4 trillion of trust in independent registered investment advisors.

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BlackRock is a barometer for the broader market, acting as an almost leverage play on stocks.

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Today, investors are treating individual names on their own individual merit.

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This healthier framework is often consistent with lower volatility.

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The change towards lower correlations is good news for active management in the active versus passive debate.

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Correlation spikes were observed during the China devaluation in August 2015, when oil was at $26, and around Brexit.

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The election has been the first macro event in 18 months where correlations have actually declined.

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The market is not terribly extended at this point according to Strategas Research Partners' work.

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J.P. Morgan's stock went nowhere for 17 years, peaking in March 2000.

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The move in J.P. Morgan through $65 and to $80 is a game changer.

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The financial sector is in the early innings of a new secular bull market.

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When a sector stays out of favor for 10 to 12 years, the next number of years tend to be quite good.

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Tech was out of favor from 2002 up to 2010, and healthcare up through about 2009.

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Wage growth has not picked up meaningfully, and real disposable income is slowing noticeably.

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BlackRock spent the last 24 months not making anyone any money, similar to the broader market.

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The breakout in BlackRock over the last several weeks is welcomed.

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Financials have become relative plays for the first time in a decade.

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The energy sector is the most difficult call on the street right now.

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Oil could grind towards $60 over the next number of months.

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The history of oil shows a 70% decline only a year removed.

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The next number of years for oil could look like a big trading range with vicious rallies and declines.

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The street is still running net short S&P futures, which is not reflective of a very euphoric environment.

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Lower correlations reflect normalcy in the market.

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There is a dichotomy between what people are saying and what they are actually doing in the equity market.

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Greater emphasis should be placed on actual positioning data over survey data.

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The number of downgrades to upgrades for the bank group since the election has been staggering.

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Sentiment often trails actual price action.

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The market started to change over the summer, with leadership changing before bond yields rose.

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Financials started to improve by July, and industrials showed leadership all year.

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The story will follow price action, and price action is always more important than sentiment.

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Sentiment might get too aggressive in the first quarter of the new year.

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The fourth quarter GDP is tracking not that great.

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Durable goods data is unlikely to change the trend until potential Trump policies are delivered.

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Business investment has not been on a good trajectory.

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Weekly jobless claims are at extraordinarily low levels.

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The Fed is worried about a tight labor market if Trump's policies kick off another wave of hiring.

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Sentiment can be thought of as what people say they're doing versus what they actually are doing (surveys vs. positioning).

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Mean reversion is still the name of the game for oil.

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Corporate tax reform that incentivizes business investment and personal income tax reform targeted at lower-income groups would contribute most to growth.

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Many investors are cherry-picking Trump's policies, focusing on tax reform positives and ignoring potential negatives from unknown trade policy.

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Forecasts for the economy under Trump must be nimble due to many unknowns, especially trade policy.

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A strong dollar call dampens growth.

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For every 10% sustained increase in the trade-weighted dollar, it can dampen GDP growth by about half a percentage point.

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Stronger dollar dampens overall business investment and inflation.

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The US consumer is buying more but at deeper discounts this holiday season.

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Big box retailers continue to lose share to internet retailers like Amazon.

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The consumer remains cautious overall.

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A growing share of the population is aging and moving into age cohorts with lower rates of spending.

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The household balance sheet is encouraged, with very little exposure to variable rates.

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As interest rates rise, interest expense on the balance sheet does not eat into disposable income as it has in the past.

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The bank group has the second fewest number of buy ratings among sell-side analysts compared to any other group.

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