Objectively looking at Trump trade/More euphoria/Air cargo/Earnings comments/Yen/China

PredictIt has a Trump win now up to 66% from 60% on Friday in light of the tragic events Saturday. It was at 55% right before the debate. Biden is down to 26%, down 1 pt and compares with 45% before the debate. My friend Eric Rosen, who pens the widely read Rosen Report on Substack twice per week, highlighted yesterday that Reagan got a 22 pt lift to his poll numbers after he was shot. 

Everyone is passing around their favorite Trump trades but I think we've seen over the past century that stock market moves are more random than what a president can dictate. Yes, a change in the corporate tax rate was a big deal in terms of corporate earnings but that won't change much in the next four years. Personal tax rates certainly matter but at best we'll get a continuation of the current rates. The regulatory state can ease but with the Chevron ruling, judges and Congress now will be more influential on that. Healthcare payments are mostly driven by government so who is president might matter here as well as for defense spending. As for overall government spending, whether Congress is split or not in terms of parties of course will hugely matter but either way, government spending is out of control and will continue to be so regardless of who is president. I do believe though that whoever runs the FTC will have a big influence on the pace of M&A since it's been basically stunted over the past 3 1/2 years. 

PredictIt/Trump in orange, Biden in white

Moving on. As measured by the Citi Panic/Euphoria index, the Euphoria is getting more euphoric as their index hit .52, up from .46 in the week before and you have to go back to 2021 to see a higher read. Again, take note because of the statistically significant implications, according to Citi, of a read this high. 

The World ACD gave us air cargo data on Friday in light of the squeeze higher in container shipping rates. The average spot rate for a cargo flight from Asia Pacific to the US on a per kilo basis is up by 68% y/o/y. The global rate of $2.57 per kilo is higher by 14% y/o/y. Again, as said with container prices now, someone has to eat this and we'll see who in the coming months/quarters based on what can be passed on to one's customers.