Latest news with #ArtoftheDeal
Yahoo
5 hours ago
- Business
- Yahoo
After the TACO trade, here comes the ‘Trump collar.' What that means for stocks.
Early action on Monday shows Wall Street starting the week on the back foot, as trade-war concerns once again dominate the narrative. This may come as no surprise to Charlie McElligott, strategist at Nomura. What on Earth is going on with the American consumer? My daughter's boyfriend, a guest in my home, offered to powerwash part of my house — then demanded money I help my elderly mother every day and drive her to appointments. Can I recoup my costs from her estate? My father-in-law has dementia and is moving in with us. Can we invoice him for a caregiver? 'I'm not wildly wealthy, but I've done well': I'm 79 and have $3 million in assets. Should I set up 529 plans for my grandkids? Known for his colorful stream-of-consciousness notes examining derivatives, McElligott taps the ever-expanding lexicon of Trump trades to tout the 'Trump collar' as a way to explain the latest market moves. A collar, in option markets, is a strategy used to protect against significant losses, but which also limits potential profits. Collars tend to be used when a trader is generally optimistic about an asset owned for the long term, but there's concern about short-term volatility in the market. The trade is struck by buying an out-of-the money put option (the right to sell a security at a particular strike price within a given time period) and selling an out-of-the-money call option (the right to buy a security at a particular strike price within the same time period). 'Out of the money' refers to when a call-option strike price is above the current asset price and when a put-option strike price is below the asset price. McElligott argues that investors should think in terms of a collar when they consider a market that is kept in a range by U.S. President Donald Trump's tariff rhetoric — a market that seems to want to trundle higher, but which is regularly knocked back by Truth Social posts. 'You all know 'Art of the Deal' Trump … and over the past month+, the 'TACO'-kind … but what it all adds up to now is the de facto 'Trump Collar,' as the market retrains the reaction function in the 'Human VVIX' era,' says McElligott in an email missive sent Friday. Readers will by now be familiar with the TACO trade. The VVIX is a gauge that measures the volatility of the Cboe volatility index 'VIX' VIX, and McElligott is clearly laying the cause of market vacillations at the feet of Trump. He presents the table below to illustrate just how much Trump — the 'Status Quo Disruptor in Chief,' as he calls the Republican president — has been impacting markets. McElligott says that, late last week, when the S&P 500 SPX sat only a few percentage points shy of February's record high, the stock market was in the upper band of its range trade because investors have come to terms with what the analyst calls Trump-collar 'reflexivity.' By this he means that traders are aware that a falling market, in response to harsh Trump trade talk, will subsequently be lifted by Trump's delivery of more soothing trade comments. But 'Trump then becomes re-emboldened' and talks tough again, causing investors to sell call options to hedge against declines. We see this happening when the S&P 500 moves back toward the 6,000 level, according to McElligott. Then in response to the 'Human VVIX' downside scenario — as Trump again talks tough — the volatility of volatility re-expands, and U.S. dollar assets trade lower again in unstable fashion. That once again 'restrikes the Trump Put, as his 'pain threshold' is hit in financial markets' and they rally back 'off the precipice,' he said. 'Rinse, repeat,' says McElligott. He says that, if a trader had bought S&P 500 futures five days after Trump delivered some of his fiery tariff rhetoric — the market had fallen in response — and sold S&P 500 futures five days after Trump pulled back from that earlier position — the market had then rallied — the trade would have resulted in a 12% return. U.S. stock-indices SPX DJIA COMP are lower at the opening bell as benchmark Treasury yields BX:TMUBMUSD10Y rise. The dollar index DXY is lower, and gold GC00 is trading around $3.355 an ounce. Oil prices CL.1 are sharply higher despite OPEC+ announcing another sharp production hike. Key asset performance Last 5d 1m YTD 1y S&P 500 5911.69 1.88% 3.96% 0.51% 12.02% Nasdaq Composite 19,113.77 2.01% 6.32% -1.02% 14.21% 10-year Treasury 4.447 -7.10 9.80 -12.90 5.20 Gold 3375 0.52% 0.94% 27.87% 42.33% Oil 62.84 2.15% 9.80% -12.56% -15.09% Data: MarketWatch. Treasury yields change expressed in basis points Need to Know starts early and is updated until the opening bell, but to get it delivered once to your email box. The emailed version will be sent out at about 7:30 a.m. Eastern. U.S. economic data due on Monday include the S&P final U.S. manufacturing PMI for May at 9:45 a.m. Eastern, followed at 10 a.m. by the ISM manufacturing survey for May. China has vowed to fight back over what it called 'discriminatory restrictive measures' by the U.S. that it said are endangering an agreement hammered out between the two countries last month. Shares of Cleveland-Cliffs CLF, Nucor NUE and Steel Dynamics STLD are surging after Donald Trump said he was slapping 50% tariffs on steel imports. The Federal Reserve will likely be able to lower interest rates this year, and recent data support this outlook, Fed governor Christopher Waller said. Fed Chair Jerome Powell will make some opening remarks at 1 p.m. Ahead of him, Dallas Fed President Lorie Logan speaks at 10:15 a.m., and Chicago Fed President Austan Goolsbee speaks at 12:45 p.m. The law firms that appeased Trump — and angered their clients. 'You are going to panic,' Jamie Dimon tells regulators about what will happen when the bond market cracks. Why are bond investors contrarian while equity investors extrapolate? There's a lot of chatter about how rising Treasury yields may be damping demand for stocks. But as Goldman Sachs shows, it's not so much the height of yields that's the problem, but more the speed at which they rise. Read: Here's why Goldman still sees 10% upside to the S&P 500, even with bond yields rising Here were the most active stock-market ticker symbols on MarketWatch as of 6 a.m. Eastern. Ticker Security name NVDA Nvidia TSLA Tesla GME GameStop PLTR Palantir Technologies BMGL Basel Medical AAPL Apple MLGO MicroAlgo AMC AMC Entertainment TSM Taiwan Semiconductor Manufacturing NIO NIO A big legal splash at Walt Disney World. Millions of honeybees abuzz after truck overturns in Washington state. Anthropic's new AI model didn't just 'blackmail' researchers in tests — it tried to leak information to news outlets. For more market updates plus actionable trade ideas for stocks, options and crypto, .'The situation is extreme': I'm 65 and leaving my estate to only one grandchild. Can the others contest my will? 'You never know what might happen': How do I make sure my son-in-law doesn't get his hands on my daughter's inheritance? 10 nuclear stocks expected to rise as much as 94% after Meta-Constellation deal Strategists forecast a sizzling summer for small-cap stocks 'I am getting very frustrated': My mother's adviser has not returned my calls. He manages $1 million. Is this normal? Sign in to access your portfolio
Time of India
14 hours ago
- Business
- Time of India
First TACO, now Trump Collar: Shocking new nickname of the President making waves in U.S — who coined it and why it matters
A new nickname for Donald Trump is trending on Wall Street, it's called the 'Trump Collar'. This term comes after another nickname 'TACO', short for 'Trump Always Chickens Out', became popular earlier. The person who came up with 'Trump Collar' is Charlie McElligott , a strategist at Nomura, as per reports. McElligott is known for using colorful, creative language in his financial analysis. A 'collar' in finance is a strategy that protects from big losses but also limits gains. Traders usually use this strategy when they believe something will do well in the long term but are worried about short-term risks, as per MarketWatch report. McElligott says this idea fits with how the stock market reacts to Trump; it wants to go up, but gets shaken by Trump's random social media posts, especially on Truth Social. Basically, the 'Trump Collar' describes how Trump's actions and posts make the market nervous, even if the overall economy looks okay. Play Video Pause Skip Backward Skip Forward Unmute Current Time 0:00 / Duration 0:00 Loaded : 0.00% 0:00 Stream Type LIVE Seek to live, currently behind live LIVE Remaining Time - 0:00 1x Playback Rate Chapters Chapters Descriptions descriptions off , selected Captions captions settings , opens captions settings dialog captions off , selected Audio Track default , selected Picture-in-Picture Fullscreen This is a modal window. Beginning of dialog window. Escape will cancel and close the window. Text Color White Black Red Green Blue Yellow Magenta Cyan Opacity Opaque Semi-Transparent Text Background Color Black White Red Green Blue Yellow Magenta Cyan Opacity Opaque Semi-Transparent Transparent Caption Area Background Color Black White Red Green Blue Yellow Magenta Cyan Opacity Transparent Semi-Transparent Opaque Font Size 50% 75% 100% 125% 150% 175% 200% 300% 400% Text Edge Style None Raised Depressed Uniform Drop shadow Font Family Proportional Sans-Serif Monospace Sans-Serif Proportional Serif Monospace Serif Casual Script Small Caps Reset restore all settings to the default values Done Close Modal Dialog End of dialog window. by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like Dermatologista recomenda: simples truque elimina o fungo facilmente Acabe com o Fungo Undo In an email, McElligott said, 'You all know 'Art of the Deal' Trump and over the past month plus, the 'TACO'-kind but what it all adds up to now is the de facto ' Trump Collar '', as per MarketWatch report. He also called Trump the 'Status Quo Disruptor in Chief', meaning he's really good at shaking things up and making Wall Street unstable. The phrase 'Human VVIX era' McElligott used refers to how Trump's unpredictability is like a person causing market volatility , as stated in the reports. Live Events FAQs Q1. What is the "Trump Collar"? It's a new nickname showing how Trump's actions make markets shaky. Q2. Who made up the term "Trump Collar"? Charlie McElligott, a strategist at Nomura, coined it.
Yahoo
a day ago
- Business
- Yahoo
Tired of ‘TACO?' Here comes the ‘Trump collar'
With Wall Street starting a new week on its back foot, one financial analyst, known for his colorful language, has come up with a new way to describe what's ailing investors. Just when you were tired of 'TACO,' or 'Trump Always Chickens Out,' say hello to the 'Trump Collar.' That comes courtesy of Charlie McElligott, a strategist at Nomura, according to MarketWatch. For those of you who aren't fluent in WallStreetese, a collar, in the option markets, is a strategy that protects against big losses, but also limits profits, according to MarketWatch. Traders tend to use them when they're optimistic about an asset over the long haul, but are sweating short-term volatility in the market, according to MarketWatch. According to MarketWatch, McElligott has argued that investors should think about collars when they think about a market that's been smacked around by Trump's tariff rhetoric. In other words, one that wants to move higher, but gets knocked back by incendiary Truth Social posts, MarketWatch reported. 'You all know 'Art of the Deal' Trump … and over the past month+, the 'TACO'-kind … but what it all adds up to now is the de facto 'Trump Collar,' as the market retrains the reaction function in the 'Human VVIX' era,' McElligott said in an email last week. McElligott has referred to Trump as the 'Status Quo Disruptor in Chief' because of his ability to send Wall Street tumbling, MarketWatch reported. Worcester activist critical of city manager faces one-year city hall ban Residential retrofitting program turns on high-speed internet for Bay Meadow Apts. in Springfield A Pennsylvania Democrat and Republican come to Boston. Bipartisanship breaks out GOP Mass. governor hopeful Brian Shortsleeve touts 'record' $416K fundraising haul Bill Clinton raises alarm over Donald Trump: 'We've never seen anything like this before' Read the original article on MassLive. Sign in to access your portfolio
Yahoo
5 days ago
- Business
- Yahoo
Karl Rove Says This ‘Muddled Mess' Trump Policy Will Cost The GOP Next Year's Midterms
Longtime GOP strategist and commenter Karl Rove predicts President Donald Trump's tariff policies will cost Republicans next year's midterms, calling the administration's messaging 'a muddled mess.' 'The story isn't good for the GOP,' Rove said in a column published in The Wall Street Journal Wednesday. Rove warned fellow Republicans that Trump's 'tariff demands are weighing him down' as his general job approval sinks and voters disapprove of his handling of the economy, citing data from RealClearPolitics. Trump and Rove have clashed in recent weeks as the Bush administration's senior adviser became critical of the president's strategy. Last month Rove said Trump's approval ratings are in 'bad shape' when it comes to the economy. He also appeared on Fox advising the president to cooperate with the courts in the Kilmar Abrego Garcia deportation case. Trump responded on Truth Social by calling Rove 'a total Loser who's been wrong about almost everything!' Now Rove is warning Republicans that 'the president's frenetic back-and-forth on the subject, declaring a trade war one day then postponing new tariffs the next, leaves voters confused.' A more recent example of Trump's on-again, off-again tariff policy happened last week when he threatened to impose a 50% tariffs on imports from the European Union. That threat was backtracked on Sunday when EU heads asked to extend his deadline for trade talks until July 9. 'Maybe these apparent flip-flops were all planned by the master of the 'Art of the Deal.' But to many, it looks like cleanup on aisle six,' Rove said. Rove's sentiment was felt in Wall Street as investors came up with a new term to describe Trump's on-again, off-again tariffs, called 'TACO,' which is code for 'Trump Always Chickens Out.' 'The administration's messaging is a muddled mess,' Rove said, telling Republicans Trump should look towards 'reciprocity,' a policy he describes as 'if countries lower their tariffs, we'll lower ours.' Rove ended the column by saying 'voters won't blame foreign countries for higher prices or fewer goods. They'll blame Donald Trump and his Republican Party.' Karl Rove Undeterred In New WSJ Editorial After Trump Called Him A 'Total Loser' Karl Rove On Trump's Economy: 'He's In Bad Shape' Karl Rove Warns Trump Of The 1 Move That Will Backfire
Yahoo
6 days ago
- Business
- Yahoo
Trump Loses It When Asked About Embarrassing Tariff-Inspired Nickname
The president is taking his new Wall Street nickname very personally. Earlier this month, Financial Times columnist Robert Armstrong coined an acronym to describe a popular new trading strategy centered around Donald Trump's start-and-stop tariff policies: TACO, or 'Trump Always Chickens Out.' But when confronted with the reality of his new reputation during a White House press briefing Wednesday, Trump flipped out. 'I kick out?' Trump said initially, misunderstanding the acronym. 'Chicken out,' the reporter clarified. 'Oh isn't that nice. 'Chicken out,' I've never heard that,' Trump said before ranting that he hadn't lacked follow-through on his trade policies, referring to his arrangements with China and the European Union. Instead, Trump claimed that he had heard complaints he was too tough. 'You call that chickening out? Because we have $14 trillion now invested, committed to investing—when Biden didn't have practically anything, Biden, this country was dying,' Trump said. 'You know we have the hottest country anywhere in the world. I went to Saudi Arabia, the king told me, he said, 'You've got the hottest count—we've got the hottest country in the world right now.' Six months ago this country was stone cold dead. We had a dead country.' 'We had a country of people that didn't think it was going to survive and you ask a nasty question like that,' Trump continued, apparently blaming the media for reporting on the talk of the town. The Art of the Deal author then continued to rant about how he had gone high on his initial tariff proposals with the aim of keeping the final negotiation at a higher rate than previously accepted. (This has proven to not be the case. In the last month, several countries including South Korea and Japan have decided to follow China's tariff negotiating strategy, gambling that public pressure from within the U.S. will force the Trump administration to fold on its unpopular trade policy before their own economies feel the sting.) 'Don't ever say what you said. That's a nasty question. To me that's the nastiest question,' Trump scolded the reporter. In a Wednesday note obtained by Market Watch, Sevens Report Research founder Tom Essaye insisted that Trump does, in fact, always chicken out. So far, that's been true for enacting additional tariffs on Mexico and Canada, postponing his 'reciprocal' tariff plan on dozens of countries after his 'Liberation Day' announcement went south, delaying a tariff on imports from the European Union, and smashing his plan to fine China, temporarily decreasing tariffs on Chinese products to 30 percent from 145 percent. 'So, the returns are somewhat conclusive: The TACO trade has worked and buying stocks on extreme tariff-related threats has worked,' Essaye wrote, noting that known gambit's growing popularity will translate to diminished returns.
