Don’t Fade The Trump Put
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If you’ve been paying any attention to markets this week you’ve probably noticed that everybody just sort of decided the Trump Put is dead.
Barclays even put out a whole note on Friday making the case. It’s become one of those things where if you’re not bearish on the Trump Put you’re the idiot in the room.
The reasoning is basically that Trump keeps trying to talk markets up with de-escalation headlines on Iran, the headlines aren’t sticking, and so the put is dead or dying.
And I don’t know, maybe I am the idiot in the room, but I think that’s kind of a lazy read.
It’s been an awful stretch. The S&P just posted its fifth straight weekly loss, which is the longest streak since 2022, and the Nasdaq and Dow both tipped into correction territory on Friday. Oil is pushing $95 with Brent above $110. The whole vibe is terrible. I’m not going to pretend otherwise.
And it’s not like the administration wasn’t trying this week. Trump was out there constantly. Monday morning, pre-market, he posts on Truth Social that he’s pausing all strikes on Iran’s power plants for five days, says they’ve been having “very good and productive conversations” toward a resolution.
Markets went nuts. Futures ripped. Oil dropped something like 15% in minutes. Stocks added about $1.7 trillion in value before most people had finished their commute.
And then Iran came out and said there were no talks, no negotiations, and that the whole thing was just Trump trying to manipulate oil prices. Which, I mean, yeah probably.
That was the only headline all week that actually caused a meaningful rally. And it didn’t even last a full 24 hours.
Not that it stopped him from trying. He was out there every day the rest of the week doing everything short of a PowerPoint presentation for the press pool to try to keep this thing together.
Tuesday he’s telling reporters “this war has been won.” Wednesday a 15-point ceasefire proposal leaks and Iran’s military literally mocks it. Thursday he’s saying Iran is “begging” to make a deal.
None of it moved the needle. Markets just didn’t care anymore.
Thursday was the worst single day for the S&P since the war started and Friday was another 1.7% down. By the end of the week that Monday morning sugar rush had been completely erased and then some.
So I totally get why people are writing the obituary for the Trump Put. He threw everything he had at this week and the market shrugged it off. It does look broken.
But I keep coming back to this: what exactly do people think the Trump Put is?
Because I think there’s a confusion happening between the market’s short-term reaction to any given headline and Trump’s underlying motivation to actually end this thing.
The put was never really about one Truth Social post making the S&P go up. The put is that you’ve got a president who treats the stock market like a personal approval rating, and who now finds himself staring down midterms in November with a 35% approval rating, gas prices that won’t stop climbing, and a war that was supposed to be a “short-term excursion” entering its fifth week.
The political incentive to find a resolution, or at least keep signaling that one is close, is about as high as it can possibly get right now.
And that’s kind of what I actually saw this week? Like yeah, none of it worked. The market didn’t buy any of it. But the guy was out there every single day trying. The pause on strikes, the ceasefire plan, the “begging for a deal” comments, all of it. Iran kept slapping it down and he kept swinging. That tells you everything about where the motivation sits.
Trump literally cannot afford to let this spiral. His party is already polling behind Democrats for the House. Cost of living is the number one issue. You think this guy is just going to shrug and let oil hit $120?
This is the same person who bragged about the Dow hitting 50,000 while it was actively selling off last week. He is not going to develop a sudden zen-like detachment from market performance. That’s just not how he’s wired. At all.
What Barclays and market participants are really picking up on, I think, is headline fatigue.
The market watched Trump try every trick in the book this week and none of it changed the actual situation on the ground, so now traders are just tuning it out. That’s fair. But the put was never about whether algos chase a Truth Social post. The put is about a president who will keep swinging until something actually connects because the alternative is politically catastrophic for him.
Now the bear case on my thinking is pretty obvious...
The Strait of Hormuz is still effectively closed. The Houthis have apparently decided this is a great time to get involved, which is just fantastic. Consumer sentiment is in the gutter and the Fed is trapped between an oil-driven inflation spike and an economy that’s clearly slowing.
If this war drags into the summer with no resolution, you’ve got a genuine stagflation problem and I honestly don’t know what the Fed does. None of that is good.
But I just keep landing in the same place. The people declaring the Trump Put dead are implicitly betting that Trump is going to accept a recession heading into November. That he’s going to watch gas prices blow through $5 and the market roll over and just… not try everything he can think of to stop it.
I don’t see that. I’ve been wrong before but I really don’t see it.
I’m not making any trades off this or anything. Just thinking out loud on a Sunday. Take it for what it’s worth.
Anyway. Go touch some grass.
Disclaimer: I’m just one investor thinking out loud. This isn’t financial advice. Do your own work before buying or selling anything.