The ‘Trump trade’ is on pause. Political uncertainty is now in the driver’s

By Finance News On Jul 21, 2024

It didn’t take long to remember what a second Donald Trump presidential term would mean for the stock market, did it? Unpredictability. Random attacks. No one safe. Mercurial positions. The only difference? Former Vice President Mike Pence meant nothing. He was supposed to mean nothing. Now the Republican candidate’s new running mate, Sen. JD Vance of Ohio, means plenty: a populist agenda that antagonizes the “barons,” conveniently leaving out “robber” during his GOP convention speech so we can complete the phrase. Vance’s antagonist approach may be something said to placate the extreme right, not unlike Mary Elizabeth Lease, an activist aligned with the Populist Party in the late 19th century when that was a party that vowed to “raise less corn and more hell.” Right into the cauldron comes the mammoth uncertainty of the Democratic Party presidential race after President Joe Biden announced Sunday that he was dropping out of the 2024 election . Biden’s decision came in response to mounting pressure from figures within his party , who worried that if the president did not drop out, Trump would be marching toward a landslide victory in November. Total uncertainty. We don’t like uncertainty. But in most cases a winning strategy for uncertainty is a movement to the center — by both parties. That might mean a break from what we had to believe would be endless “America first” abdication and a spiting of U.S. allies even if it comes to protecting them without some sort of tithe in return. Think of the vicious decline last week in Club holding Advanced Micro Devices , — a little more aggravated than I first thought when we put on a small position Monday —after the semiconductor industry was injected back into the geopolitical spotlight. Perhaps investors fretted that its hefty sales to China could go away if the U.S. implements tougher export controls. They may also have worried about its reliance on Taiwan after Trump’s comments about the self-governed island , which is a chipmaking hub. The Biden position had been to try to protect Taiwan — awfully hard with no geographic room to maneuver— and to build semiconductor factories in the U.S. to make us less reliant on the island. We can’t make Nvidia and AMD’s advanced artificial intelligence chips in the U.S. because they are too specialized. But the chips need by non-cloud computing giants — i.e. everyone else — can be made here. But let’s go a little deeper. Not much is known about Vice President Kamala Harris . From all I can tell, she has followed the Biden administration’s policies on pretty much everything. I have twice met her husband, second gentleman Doug Emhoff. He came up to me at a White House correspondents’ dinner afterparty last year and told me he watched “Mad Money” with his kids. I had no idea who he was but was thrilled that he was a fan. He talked about how interested he was in the stock market and that he wanted his kids to learn so they watched my show together. I…