Macro Mondays: The Trump Inauguration Trades 🇺🇸

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1:07Please take a moment to give it a five-star rating. It truly helps us continue to bring top-tier content. Thank you so much. Hello, everyone. Hello out there. Welcome to this week's edition of Macro Mondays. My name is Mikkel Roswald, your usual host, back from a week in the sun. And back in the studio with you, Andreas. How are you? It doesn't look like you've been sun-tetting a whole lot, Mikkel, to be honest. We brought our three-month-old daughter down there, so it was mostly hotel room antics. But you stayed within the air condition. Absolutely. Absolutely. We are northerners after all. Anyway, Andreas, what a weekend we've had.

1:44What a day today. It's inauguration day. We're, of course, still working here in Europe. But my gosh, what a day today. This is going to be part preview of the inauguration. And also, we're going to try and talk about everything not Trump related. I know that's very, very tough right now because everything seems to be Trump related. and there seems to be so many good storylines, but we'll try and do that. Let's see what we can get about Andreas. We're, of course, sending this to you live and recording this for podcast right ahead, a couple of hours ahead of the inauguration. So this might be a good time to play our usual disclaimer slash jingle.

2:24So remember that our trade recommendations and analysis here might be... Summertime is maybe good, sometimes it's maybe shit. exactly that's generic atus before you guys out there so andreas uh let's jump right into it i mean we've we've talked a lot about um the trump crypto policy we've had the meeting with between eric trump and michael sayer what was going to happen strategic bitcoin reserve and then the trump coin landed is that it was that the whole trump bitcoin policy what what what are you making of all this? I don't know, really. I think a lot of pundits expected the Trump administration to be more about utility projects rather than meme coins.

3:10And here we are with the Melania coin trading. My best guess is that we'll get a Barron coin today. Eric coin? Yeah, Eric coin, maybe a Greenland coin. I'll buy the Greenland one. I'll buy the Greenland one if they create one. And so, you know, I've got mixed feelings about this. In my opinion, it doesn't look overly pretty, this move from the Trump family. You know, a couple of hours after Jerry Gensler left office as the policeman in charge of financial oversight, amidst this big crypto launch party on Friday where all of the quote-unquote more serious projects were present. They launched this and, you know, it's been a great success so far, obviously.

4:01But we had the Melania meltdown yesterday and I have no fucking clue where this ends, to be honest. All I can say is that I'm not involved. If I sound bitter, that's the reason why. But I'm not planning on being involved in this either because I've got no clue where this is heading. and you know I think it's both a it's both for good and for bad that this is now part of the like policy journey for the Trump administration because obviously with this kind of wealth vested in the meme coin story now you know they cannot pull the rock from under this no it would be an absolute catastrophe if they do they can't do a hawk to a no no no that would be a catastrophe and you know So in that sense, he's more incentivized than ever to throw money at the problems of this sector should they arise, right?

4:58So before this, he had some vested interests in it. Now he's got billions of vested interests in the Solana space. You know, it's just an amazing development and I've got mixed feelings about it, to be honest, Miguel. You know, in a sense, I think this is kind of blown out of proportion for them. I don't think they planned on this being such a big success. You know, the Trump NFTs, the cards and all that. It wasn't really a biggie, right? And, you know, this was probably something Eric told Donald. Okay, let's do this, right? You know, it doesn't hurt anyone, right? And now all of a sudden, you know, it's one of the bigger projects on earth, right?

5:41So it's just amazing. No, no, I'm not fully buying into all the conspiracy theories that this is a way for foreign governments to pay Trump directly, etc. I don't think it was ever intended to be that. It might become that. But essentially, you've now got a crypto billionaire entering office instead of a real estate tycoon because he's not really a real estate tycoon. That's a very small portion of his wealth. But that's an important message of mine today. Fair enough. He's got, I don't know, 50 billion in net wealth from this, but he's not sold those coins, right? No. And it's probably one of the more illiquid positions you could sit on.

6:21So in my opinion, it's bullshit to say that he's earned that much money. Yeah, but I mean, yeah. Yeah, it's a different set of assets than all this commercial real estate, which might be complete garbage as well. But that's a whole other topic, Andreas. I mean, yeah, my God. You know, two takeaways from this. Solana is now linked to Trump for good and for bad. If this Trump coin melts down, it's a problem for Solana as well, in my opinion. Eutherium is completely left on the platform, if that's a saying in English. You know, Vitalik is kind of left behind and he's aiming at being like the, quote unquote, the moral purist here.

7:05And I don't think that's how it works with Trump in office. You need to work with them. You need to be a loyalist. It may be a good medium-term play from Vitalik and the Ethereum Foundation, but for now, it just seems like he's not really a part of that inner circle, in a sense. And then again, the Liberty Foundation, or whatever it's called, started buying Ethereum yesterday. So, yeah. In any case, it's bullish for the sector overall. It is. But still, there seems to be a lot of malcontent, a lot of despise from the OG crypto crowd. I mean, you've talked about decentralized finance for decades.

7:42It doesn't get more centralized than this. I mean, one person at the head of the Western world. Yeah, only 80 % of this. Only 80 % of this. I mean, yeah. It is what it is. Hi, Raoul here. Listen, I think we've got until 2030 before the economic singularity arrives. Now, it might not be the exact date, but it's around then. So we have about six years to figure out how to unfuck our future. I've put together a report to help you called prepare for 2030. It's going to help you take the first steps in that journey to make sure you're secure past 2030. So just click on the link below and start your journey now.

8:21So Michael, on top of this, we got, uh, TikTok news yesterday, basically. Right. And I think a lot of people fear Trump's relationship on the trade front with China. And then we suddenly got this slightly more almost conciliatory news around TikTok and some sort of deal being brokered between Xi and Trump on this. How do you read that from a geopolitical perspective? This is very, very interesting and potentially also very telling about the Trump administration coming in, because we've had all this animosity between the U.S. and China. President Biden has done nothing to ease that conflict. On the contrary, now we were, of course, expecting Trump to hit the gas pedal even further in that direction.

9:08But it seems like perhaps this whole TikTok tobacco, which has now been banned in the US, the potential of some sort of joint venture, shared ownership between US and China, might actually be some sort of Trojan horse or a way to open negotiations and talks with China from a tech standpoint. So I'm sure that the whole classic military-industrial complex still holds all their skepticism about dealing with China. They still want the U.S. to have strategic resilience and all sorts of areas. But this could open a new wave of tech-to-tech diplomacy.

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10:40Plus 500. It's trading with a plus. So tech guys in the US talking to tech guys in China. The tech guys in China are much further away from their government, but that might change. And could this be an opening to much less hawkish Trump on China? That's the interesting part. There's still a lot of issues to be ironed out. I don't think Taiwan is a huge issue. I don't think Trump really cares about that. There's the discussion of the value of the yuan and the value of the dollar. I don't know if they can reach common ground on that. That could be an ignition to this conflict as well. But I still think, Mikkel, that, you know, Chinese authorities, they need a weaker dollar to be able to stimulate the economy more.

11:26And that's kind of been my base case, even though I've been, you know, back and forth on this tariffs topic quite a few times. And it's been annoyingly difficult to forecast the next step from Trump on this. All I can say right now is that by the looks of it, it seems like Donald Trump intends on feathering his own nest. I think that's the best idiom to use here. And if that's the case, he'll pick a much less aggressive stance towards China as well. And one further point, if Trump can get this fixed within a couple of days, bring back TikTok? That's a very... Yeah, but they're already bringing it back, right?

12:09Yeah, but it will seem like I got inaugurated, the next day TikTok is back. Not a bad look in any case. There are some thoughts to the Ukraine conflict as well. Just one point here because a lot of people are discussing, oh, could they make a grand bargain and can they agree on this? Essentially, China wants... They don't want Russia to lose, but they don't want Russia to win either because the more Russia wins, the harder it is for China to control Moscow. So they want Russia to kind of win. The US obviously don't want Russia to win a complete win. They wouldn't mind if Russia lost, but that's out of the question.

12:44It's not even a topic in Europe anymore. So they are more or less on the same page that a middle ground needs to be found in Ukraine. The Trump proposal for peace, that's sort of the working document right now, is essentially the same that the Chinese proposed two years ago. So I think on many of these topics, there is a way forward for US-Chinese relations. then we'll have to see about the currencies but that's also a topic for another day but very very interesting signals so far so Andreas the inauguration inauguration in about four hours time let's just wanted to show this obviously some odds on what's he going to mention only 43 % on crypto Bitcoin it would perhaps be a bit much for him to address this Trump coin directly but I don't think he'll do that could spike another rally if he's interested in that.

13:35Very low on Dogecoin. Seems to be a little bit off the picture here. What's your take? America First seems to be the favorite here. What do you expect overall from this inauguration speech? You know, I think it will be crypto-focused. It's crazy to say, but, you know, it kind of has to be given what's happened over the weekend. And, you know, Eric Trump has been incredibly active this morning, European time on Twitter. You know, kind of hinting at something big happening today in the crypto space. Could be a baron coin, by the way. Yeah, it's a tall coin. But anyway, you know, it will probably be a part of that speech.

14:24You know, that would be my best guess. I think he'll stay away from over-promising during the speech. But in any case, this is the defining moment for crypto in many ways, for good and for bad. Let me put it like that again. Yeah, I agree completely. I think my view on this speech is that first and foremost, as far as I understand, it's going to be a different setting than the usual one. It's going to be held in sight because it's too cold. I think we've had one or two US presidents die of pneumonia that they contracted on giving their inauguration speech. So they're considering his age that might not be in you.

15:02You had pneumonia a couple of weeks ago, so you can attest to that. I think he's going to be talking about this golden age that he's been talking about. That might sound like a sort of MAGA. What does that actually mean? I think there is some merit to the view that Trump is viewing the next four years as a peak period. that he's not necessarily planning policy to create or to work in 10 or 20 years time. This is the period, the next four years, so perhaps a little bit longer, is where things need to work, which again speaks to lower interest rates, etc. We'll see. We're making guesswork here. Yeah, so Miguel, for the weeks ahead, we have some odds from the poly market as well on...

15:43Let's pull these up. The Bitcoin reserve on non-tariffs, right? So if we start with the Bitcoin reserve, over the next 100 days, what are the odds that the US Treasury will actually buy Bitcoin? And it's priced at 50-50, right? Over the next 100 days. You know, if you look at the next seven days, it's priced at maybe 15 % probability of them buying something. So, you know, to win in this bet, they need to buy Bitcoin. It's not the announcement. They need to buy. Yeah. And I don't consider it unlikely that they buy over the next 100 days. I think it's much more likely than what's priced in here, especially given everything that has happened this weekend.

16:20Then on tariffs, right? So the base case is ish that something will happen on tariffs with regards to China this week. If we listen to Scott Besson and Stephen Miran and those parts of the administration, we'll likely get some sort of gradual steps towards higher tariffs on China. Then on the other hand, I kind of agree with that 60 % probability. I think that's fairly likely, maybe a bit higher. But then on the other hand, the market is basically fully convinced that nothing will happen on Europe. Nothing, especially on the UK. And given the back and forth between Elon Musk and Keir Starmer, I wouldn't rule out that they have something in store for the UK, to be honest, because this whole idea that the UK and the US is an unbreakable alliance, they're not even able to talk to each other right now.

17:17I mean, they're calling each other pedophiles. Is that a good, you know, common ground for a benign trade policy? No, it's not. And so, you know, that is the most underpriced risk out there that they do something on the UK, in my opinion. I agree, agree. It isn't the first week. That's why I think it is a bit steep. But still, no one expects them to do anything on the UK. You also have to consider, as we've talked about, if we presume that tariffs are mostly negotiation tool, which third parties or which countries is Trump going to have negotiations with? And he is going to have negotiations with the UK and European Union in NATO.

17:57So it might not be in the first week, but I'm sure he will put this up. If you don't pay here, you can pay here, that sort of logic. Just to get back to the Bitcoin part, I mean, I know this is not, this is a polymarket, give it whatever you want, but this is priced in to some extent, at least to a 50 % probability. Yeah, sure, sure. So he has to do something unless he wants to pull Bitcoin down massively. He has to do something. And he will. Okay. Will he buy Greenland, Mikkel? Will he mention Greenland? You know, sitting here in the kingdom of Denmark, it's our fucking island. You know, so we'll have to get...

18:36My gosh, it's an ongoing case. I think, as we've mentioned before, I think this is an idea that's born way before Trump into politics. It's been a dream or a requirement for the U.S. military, and it is first and foremost a military question. Let's not forget that strategic perspective. Trump has sort of seized this idea and is running with it because it looks to him like an easy win, and it might be. It's getting a little bit more complicated now. The Greenlandic leadership has dawned upon them that they're being bandwagoned a little bit here by Donald Trump. They thought they could go for independence and then have that pick between great powers.

19:15That's very clearly not the case. They can absolutely not make any dealings with China. At least Trump has gotten that message out there. But Andreas, we talked about this a few weeks ago. How on earth do you trade this? Because there's not really a huge Greenland stock index to trade. You found a way. Well, yeah, it's an Australian listed company. formerly named Greenland Mineral Resources, something like that. It's listed under the name ETM. And, you know, it's actually been on the move, especially after this Trump presser on Greenland. What you should know about this case is that the company is currently stuck in a court case with the Danish authorities because essentially the people locally in Greenland, they refuse to mine uranium.

20:12And this was one of the better parts of the project they have in Kvanefjell, in the very south of the island. And for now, it's basically stock and cord. So I guess what we're seeing here is some sort of repricing of the probability of them being allowed to extract uranium from the ground. and, you know, what's the end game here? It looks relatively cheap to where it traded back in 21. But it also requires some sort of change of leadership or change of ownership, if you want. Because the Danish authorities, they will not allow them to do so. And they basically, you know, they stand very firm in this court case.

21:00So if we get a change of leadership or ownership of Greenland, this is a big case. If we do not, it's not a case at all. And that's also what's frightening to the Greenlandic people because it's mostly the locals who have refused this mining. And that's one of the four problems with mining in Greenland. One, it's cold as fuck. Two, you've got no railway. Three, you've got no local workforce. And four, the locals don't want you to mine. So those are quite big obstacles. And they found themselves in a horrible case. So I have quite a lot of sympathy for this company, actually. They invested quite a lot, and then were rejected the right to start digging, essentially.

21:36So let's see a way to better the Greenlanding case. Okay, Andres, what's happening beneath the hood of this economy if we set Trump aside? There is still an economy going on there. People are buying and selling stuff, getting jobs, getting fired. So let's try for a minute to cut Trump out of the equation and have a look. things are boiling in the Middle East. Yeah, maybe let's start with that, Miguel, because, you know, we have the oil price on the screen right now. And it broke out of this very narrow wedge pattern. Was it four or five weeks ago? And it's been trading very, very bit ever since.

22:15And I think we're now approaching some sort of pause level. I'm actually involved on the short side in this trade. And in my opinion, you know, the geopolitical risk premium is fading. It's a good example of what you mentioned from Israel-Gaza. There's a potential scope for a broader deal in the Middle East now, in my opinion. I'll get back to it in a second. And with oil prices trading, say,$10 higher-ish, there's a pretty decent incentive for OPEC to start producing a little bit more now, which is, you know, the back and forth we always have to consider in oil markets. as soon as oil prices go up, OPEC can produce a bit more without harming their bottom line, basically.

23:00So I think that's where we're at. But this deal in Gaza, quite the scenery down there, Mikkel. What do you make of it? Is this part of a broader deal? It could be one of the first steps. I mean, we've had talks over a ceasefire for months, for years now. Why now? Well, obviously, it's linked to the inauguration. I think Hamas was maybe judging that this might be as good a time as any to strike this deal. But it's also a question of Israeli internal politics. Because Israel have given quite some concessions here. They're withdrawing from central Gaza. They're lending out a lot of hostages, a lot of controversial or not hostages, prisoners.

23:43Hamas fighters, they're taking prisoners. They're exchanging for hostages. And this has led to a breakup of the Israeli government. Essentially, you can't rule out an Israeli election within the next couple of months. So Netanyahu must feel safe enough that he can win an election. And that's been the big problem for him ever since the October 7th attack, who was widely criticized for that catastrophe. So this points to me that Netanyahu is feeling more safe. He feels that a new election will bring more options to put together a new coalition. the right might not be as strong as we thought it to be.

24:19So far, it's been Greer and the ultra-nationalist camp who have blocked the ceasefire deals. So this is a power grab by Netanyahu. He might be forced to do a snap election. That's not too uncommon in these parts, but that's going to be really, really interesting. If Netanyahu is strengthened in his position, that might just be what we need for broader negotiations. So, yeah, extremely interesting. extremely interesting for oil prices. I see a lot of indicators. Also potential dump Trump deregulation that could add to the supply picture. Then we'll have to see what happens with demand, especially out of China.

24:55That's another factor that's sometimes overlooked a little bit. But, you know, one thing is that we've technically broken out of this wedge pattern in oil, which is a bullish flag in many ways. But it's also very linked to the fundamentals. And, you know, as per usual, we run these daily scans across real-time gauges for both inflation and liquidity. And it's actually a very uniform picture across the globe right now, Mikkel. So maybe let's briefly run through these models. If you want access to these models, you can find them on Real Vision on an ongoing basis as soon as possible. We're basically working on a solution there, Mikkel.

25:35I said as soon as possible, right? But let's take a look at the U.S. first here, right? Because we had a question on equities and NASDAQ. That could be a good way of answering that, yeah. So the U.S. macro regime model on the screen right now, Andreas? Yeah. So up, up, up. Liquidity up. Growth up. Inflation up. That's the short answer. Yeah. And we've had a crystal clear up, up, up regime just a few years ago, 2021. I think it looks very reminiscent of that in our models right now. I've had long discussions with Raul whether this looks more like 2017 or 2021. I'm in camp 2021. But, you know, in any case, it's pretty bullish.

26:19So, you know, in an up-up regime, this refers back to the question on Nasdaq. I'd actually prefer stuff like materials, industrials, energy, you know, stuff linked to the physical production cycle who is very good here alongside crypto. But Nasdaq is not necessarily going to be the best performer here. And my bad. We traded Nasdaq a little bit on the short side. It was initially a very good idea this year. Then, you know, it made a decent comeback late last week. And, you know, you should see it as a symptom of our model suggesting that other sectors will do better than Nasdaq. It's not a bearish scenario.

27:04It's a bullish scenario, but other sectors thriving better in an inflationary scenario will do better, in my opinion. What's the time scope for this analysis? Well, for now, it looks like a very, very solid trend, right? So in my opinion, it looks like it's something that will set the trend for most of this quarter, unless Donald Trump does something to alter this picture, which is obviously tricky to forecast. But that's why we are trying to cut through the noise here, because it's actually predicting what's going on, despite all of the back and forth from Trump. There's still not an economy going on.

27:35That's a valid point. And it may be more important, Imigil, if you move to China. That's it. Inflation is starting to re-accelerate in China, admittedly from non-existent levels, but it's accelerating now. Growth is picking up a little bit. Liquidity is picking up a little bit. And you're starting to see Chinese equities doing better. You're starting to see iron ore, copper, stuff like that. We were, thankfully, very early in these trades, doing much better. So this whole classic cycle discussion is clearly leaning towards an acceleration. Even in the goddamn Eurozone, which is basically almost the definition of something that cannot accelerate.