Market Movements Amidst Political Turbulence: Trump, Assassination Attempt, and RNC Highlights, Ep. 261

Welcome to the latest episode of the Capitalist Investor, where hosts Derek, Tony, and Luke delve into the most pressing financial and economic developments affecting investors today. In this episode, the crew tackles a number of hot topics, offering keen insights and thoughtful analysis on recent events and their potential market impact. Here are the five hottest topics discussed in this episode:

1. Trump's Assassination Attempt
Undoubtedly the most shocking event of the week, the assassination attempt on former President Donald Trump was a central focus. Luke kicked off the discussion by recounting his firsthand experience of the moment the news broke. The team analyzed the immediate aftermath, covering how Trump’s condition and subsequent speech at the Republican National Convention injected a new energy into the American public. The attempt created an atmosphere of unity among rational Americans, potentially influencing future political dynamics.

2. Market Response to Political Stability
Tony brought the conversation to the investment and economic implications of the recent events. He noted that markets have started pricing in a potential Trump victory in the upcoming elections. Derek added that the promise of lower corporate tax rates from 21% to 15% could foster a pro-business environment, leading to market stability and reduced volatility. The crew emphasized how knowing the political landscape allows businesses and investors to plan for the future with more confidence.

3. Corporate Tax Policy and Market Planning
The discussion moved to Trump's proposed tax changes. Tony highlighted that Trump's intention to lower the corporate tax rate from 21% to 15% would be a significant move for businesses, allowing for better long-term planning and reducing market volatility. This could potentially lead to a more favorable investment climate, sparking optimism among investors.

4. Small Cap Stocks and Deregulation
The hosts also delved into the rise in small-cap stocks and the benefits of deregulation. Tony pointed out that Trump and his team’s inclination to deregulate could boost financial institutions and small businesses. Luke noted that the spike in the KRE Regional Banking ETF suggests investors are already bullish on deregulation, which would facilitate more loans and provide a friendlier environment for small businesses to thrive.

5. Cryptocurrency and the Influence of Bitcoin
Last but not least, the crew touched on the rally in Bitcoin following the announcement of JD Vance as Trump’s vice-presidential pick. Known for his support of Bitcoin, Vance’s selection created a ripple effect in the cryptocurrency market. Tony posited that the digital currency could see even higher highs as confidence in the cryptocurrency sector grows. The implications of a pro-Bitcoin vice president were discussed at length, particularly in relation to the broader acceptance and regulatory environment for cryptocurrencies.

Final Thoughts
Derek concluded the episode by summarizing the overarching themes of economic stability, market optimism, and the unification of rational minds in the political sphere. He noted the importance of staying informed and prepared as the November elections approach, given the potential for rapid changes in market and political landscapes.

Listener Engagement
The Capitalist Investor team encourages listeners to stay engaged and share their thoughts. They invite questions, comments, and show ideas via email at info@swpconnect.com. Listener opinions and inquiries help shape future discussions, ensuring the podcast remains relevant and insightful for its audience.

Stay tuned for more episodes as Derek, Tony, and Luke continue to unpack the intricate world of finance, politics, and investment strategy.

Transcript

0:00

Hello, and welcome to this week's episode of the Capitalist Investor. As always, you have me, diamond hands d. We got the whole crew. Tony the tiger, cool hand Luke. What's going on, guys? What a weekend. I'd say. What a mess. I was enjoying a nice cigar with my father at Cigar 30. It's called in, like, Canton, Ohio. Next thing you know, it lasts 15 minutes. Like, last little bit of my cigar, this guy starts yelling, turn on the tv. Turn it on the tv. I'm like, what the hell is happening? Turn it on. Next thing you know, I see a picture of Trump on the ground and then getting up, pumping his fist with blood on his ear. I'm like, what the hell just happened? So that's the topic we're talking about today. That is a topic. Imagine this. I was hanging out with Mark Tupper. Oh, yeah, it got lively. But no, like, since, you know, the recording of this show, like, obviously there was an assassination attempt, then there, you know, the vice president was chosen, and the Republican National Convention is going on. It's a lot of stuff going on. Like, dude, some of the speakers at the RNC have been pretty good. Yeah, really good. I feel like there's tweeted this, there's. Like, a new Vivek speech yesterday was pretty good. Yeah, he's good. He's good at talking. Talking. Yep. I would definitely check that out if you haven't seen that. Yeah, it is. It's a great speech. It really is. There's no other way to say it. I feel like there's a new energy. That's why one thing I kind of said is I felt like the energy was just so low and America just didn't feel like America. And now, for some reason, after these events that past week, I feel like there's a newfound good energy of a lot of people coming together. Of course, you have the crazy far left. That's still insane. But the majority of logical, rational, human being Americans, I feel like, are coming together, which is cool. I agree. I completely agree. For right now, let's see how it plays out. But, I mean, things change so fast. I don't know. But the one thing I want to hit on is, I think the most important part of this podcast today for our listeners is, what does this mean from the investment economic side? There's this newfound energy. I mean, we can't assume that there's gonna be a red sweep. It sure feels like that right now. And it looks like that when you look at the polls and things going on. But a lot of stuff can happen in four months until November. Right. We don't know what could happen with even the democratic nominee, if Biden will be the nominee. So we don't necessarily know all the stuff. But I think it's important to talk about what would happen if there is a red sweep. Well, I think the last couple days of the market leading after the weekend market was up. What's that? What's that tell you? It means that, that they are, you know, the market is going to now start pricing in a Donald Trump victory. And with that victory, what essentially is happening is there's not going to be as much policy change, change, at least with monetary. So like, and I, and I will even go a layer deep. It's like taxes. When you can start planning, we talked about this in last episode, like last week or something. If you, if you can start planning for the next one, three, four years, because you know what's going to happen. Like, man, like everything's volatility is what crushes the market. Uncertainty crushes the market. If you know what is going to happen, you're going to see it's not going to be as volatile. So. Absolutely. And I think Trump's already come out and said that he's going to take the corporate tax rate to 15% from 20. What is that, 21 right now? Is it 21? That was 18. I thought it was 20. We'll have to, we'll google that as we talk here. But, yeah, so what Tony said is exactly right. We've had four years of policy already to look at. We obviously are getting additional details from the campaign and we know it's going to be a pro business environment. Right. And the market's obviously going to love that. We talk about it all the time. Every week. I win 21%. 21%. It was at 20. And Biden pumped it to 21 in 2017 after the job cuts in, or the tax cut in Jobs act of 2017. Yep. So, you know, it sound like a tax cut. He went from 20 to 21. What the f, dude? It just, everything will over. Just a scam. It really is. I'm over everything, too. So, you know, it's a, it's not a get off my lawn tip is, hey, tax cut, you don't take all my money. I bet. I just, we just saw this the other day. Like I, one of my quote unquote friends is on Facebook. He's a very left Democrat and he saw the CPI number and it came down and he goes, whoop, whoop. Like, inflation is coming down. And I'm like, hey, I don't know about you. I live in Cuyahoga county. My house got reassessed for 10% higher. So guess what? My property taxes went up 10%. Inflation's still around, dude. It still is. Even strategists, they're one of the resources that we, that we use for helping with fundamental analysis and things like that. And they came out and they created their own common man inflation and wages are just not competing under Trump, the common man inflation. Wages were outpacing that inflation we were able to keep up. Right now during Biden, we're far behind. Yep. You know, then that's. And that's. And it's basic stuff. Gas, food, shelter, and insurance. Yep, that's it. That's what, that's in the core. That's the core stuff of more. Most people, they need all of that stuff. Yeah. I would tie in cell phones, too. Anyway, so I want to go back to, I think, Trump, you know, and JD Vance and the red cabinet and policies around that. I know one of the podcasts for this week, we're going to talk more in deeper about is small caps. But one thing that's very interesting is the fact that small caps have been rallying and yields have been dropping in the market ever since, you know, Trump assassination, Trump debate a couple weeks ago, JD Vance coming in. Well, the Fed that came out and they said some stuff, too. Well, there's also news that, like power, Trump said that he wants to keep Powell in there. So there's not much uncertainty around policy changes, which is good, I guess. Uncertainty, certainty is better than uncertainty when it comes to the stock market. And Powell's been kind of a little bit more dovish as of late, rather than hawkish, basically saying, there's more work to do, but we're getting closer, we're getting closer and that the job market's not as hot. So it's kind of interesting that policy dictates our life. And the fact that there's a lot of certainty. It feels like right now, I think the markets are liking the certainty around the stock market. Yeah. They know what a Trump presidency will entail. They can kind of see what you know. We've already seen that happen for four years before. We know kind of what's in the mind. Jerome Powell and company. So if that doesn't change, I'm surprised he said direction. I did not see that comment finish. His term, at least, is what he said. Huh. You know, where my mind goes right there is that he's trying to lure Pollen to not making a political cut. Yeah, I. So will there be a, there's a. Hundred percent chance right now of a rate cut in some time. Is it really, I did see, it's like 90 or 9100 percent. I mean, nothing's. But you can call it 99.9 uncertainty. Well, I guess we'll see. It's September still three months away ish. Right. So, but overall, one thing is the small caps rising. And I will talk, we'll talk more about that in the next one. But deregulation, Trump is Trump and co. Is looking to deregulate, which is good for financials. We've talked about that. You see some banks rallying past couple of days, like regional banks, like PNC. I've been keeping an eye on the KRE, which is the regional bank ETF. So that's been looking interesting ever since. More red is looking to take over deregulation, better for loans, better for small business. I think that's one of the culprits to that. So what I'm referring to here is there's an obvious Trump rally happening in the stock market. And the question is, is it already done? Is it run up until the election? Is that, is that Trump rally kind of over with? Because, I mean, how much closer can you get to, like, I think right now, Trump, and the betting odds are like 70 is like 75% chance of winning, which is pretty damn high. Closer, can you get to 100% from here to the election for the Trump trade to keep? That's one of the things we were watching on Saturday. Yeah, Saturday night, Mark was having some fire tweets. Yeah, he was firing off. But if you think about it, a lot of, you know, like, the Senate is an election in November, too, and it could be a, I mean, they talked about it last time, but a red wave. A red wave where, you know, you have a dominance in the House, the Senate and the presidency. Like, wow, there's gonna be a lot of moving in a shaking. Well, JD Vance, I rewatched half of the movie. I fell asleep. I need to go back and watch the other half again. But I watched hillbilly Elegy, which is JD Vance's movie and book. I was watching half of that last night. But JD Vance, I think, was a great selection. I want to hit on that real quick. I think he was a great selection for VP. It kind of, like, brings in like, the Ohio, Pennsylvania, Michigan, middle class, you know, bootstrapping from the ground up story. I think that he was, he really couldn't have picked a better person for that. It's strategic for that. The swing states that are in the Midwest, that's why he's there. And you saw bitcoin rally after JD Vance was announced, he personally bitcoiner. So that was kind of interesting from a cryptocurrency standpoint. All I'm saying is a hundred thousand. Dollar coin coming in hot. Right. I'm saying us guys in Ohio, you know, we're built different. You know, we've, and we've got good. Beards, so we've invented the beard. That's right. Well, I should do it. I will say, you know, one last thing. You know, this is a show mainly about economics and finance and the markets. As someone who has really disliked the Republican Party and what it's kind of done, especially in the last three years, it does finally feel at least a bit unified. And the key players seem to be established who are outside of the mainstream. Right. I've had enough of the, you know, Mitch McConnell's and Lindsey Graham's of the world who, you know, are just liars for lack of a better term. Lifelong politicians. Yeah, lifelong politicians who will say anything to remain where they are. So from that standpoint and the message, too, you know, we talked about all the different speeches, but there was many of them that, that I think were pretty powerful. So I do at least enjoy the, the overall message that I think has been sent out in the last week. We were kind of debating on bringing this up, but I guess we can end on this one. What's very interesting, though, what day before the assassination attempt is you start looking at long short ratios and stuff on DJT, which is Donald Trump stock. Apparently there was a lot of shorting activity that happened on what, Friday? Yep. So this is, now I just want to start by saying, like, this is on, you know, x Twitter. Like, I can't confirm or deny that, you know, like it's on there and somebody's talking about it. But go ahead. Look, I'm, well, I mean, just raises questions. Did somebody know this was gonna happen? A high shorting that if he were. So, like, we go back to 911 real quickly. So you get back to 911. There was high shorting volume in the airlines, like probably another country. Like that's, that was proven. There's puts bought on airlines back and like their, you know, September of 2001, right before the airlines 911 happened, and airlines just completely plummeted. So that's happened in the past. Why would people short Donald Trump stock heavily more than usual the day before his assassination? Attempt just raises questions. There's lots of irregularities about the whole thing. We can't go into them now. But, yeah, a lot of questions still need to be answered on exactly what happened, because it seems to be unclear and not a lot of answers. I mean, he survived and the stock jumped 20, 30%. But, like, if he would have, if it was a successful assassination, you think that stock would have plummeted, or would it have gone even higher? No. No. Him tweeting is basically the only thing going on. Posting on it is really the only thing that it has going. I mean, that stock has, like, a market cap of, like, $5 billion. Crazy. It is like. And I don't think they do anything. No, they lose. I think they lost 200 million. Yeah, it's. It's worth. It's like a worthless stock anyway. How do you lose $200 million when you're just a social media player? It's just. That's amazing to me. I need to merge with Elon, figure that out somehow. Yeah, well, if he wants to, Elon wants to donate five. Yep. $45 million a month. Just take that 5 billion a year. And by the only $5 billion. 3% of his net worth. Whatever. That's only 3%. Dude. Small allocation, small allocation. All right, well, lots to. Lots to think about and watch over the next several months. But thanks for listening to this episode. If you guys have any questions or comments, show ideas, hit us up at info@swpconnect.com and we'll talk to you next week. 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