DBD Strategy Daily - German under-performance can last for years...
Is Trump's trade war a posture to win mid-term elections, an attitude that will fade out if he scores high in November? We believe that politics follow long-term rhythms that are caused by the life cycle of nations. Who ever is elected gets there because he fits what the nation wants/needs at that time, and what the nation wants is the product of its history of pains and successes. This is the basis of cycles. We accept there is a measure of fate to history that we canot escape -though this leaves some room for freedom, but it is not our subject today. Charts -long-term ones- are a very practical way to spot cycles. The relative performance of Germany to Europe and France peaked in March 2015, ahead of Brexit, Trump, French elections, the Italian coalition, Merkel's fading political power, etc. Political events are not causes, they are consequences of nation's mood. The mood is clearly populism, and this has involved inflation, surging debts, scapegoating, protectionism, etc. Alas, it often ends in war. Trump is just an ant doing its little part of the job in that scheme. Whatever happens at mid-term, even if he gets quiet, some one else's voice will get louder and vociferate similar words.
DayByDay is an independent research company providing global macro and single stock analysis, recommendation and allocation based purely on behavioural finance methods. Those include long term cycle analysis, sentiment analysis, and technical trigger. DayByDay serves all clients in need of practical and precise publications to make effective market decisions, on any time horizon, from a few hours to a few years.
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