Trump and Infrastructure

In his first address to a joint session of Congress last week, President Trump pledged to overhaul the immigration system; improve jobs and wages for Americans; deliver “massive” tax relief to corporations and to the middle class and for companies; and move forward with an Obamacare replacement.

Wow. That’s a heck of a to-do list! And it goes on …

He plans to make good on his campaign promises to rebuild our nation. That means asking Congress for $1 trillion in infrastructure investment, guided by his “Buy American and Hire American” mantra.

The president offered little on the specifics of his plan to upgrade America’s crumbling roads, bridges and waterways, only suggesting that it should be financed through both public and private capital and should create millions of new jobs in the process.

But the reality is it will be difficult to find new ways to finance such a large infrastructure package.

Now, we’re not saying that we’re against an infrastructure spending plan. Improving our roads, bridges, and waterways is certainly needed. We just don’t think our government can get a spending plan together that makes sense for all involved as quickly as the president anticipates.

But the markets clearly disagree with us.

In fact, after his speech, new life was breathed into some Trump reflation trades.

We remain wary that some of these investments — that have jumped into the stratosphere since the election — are simply moving too far, too fast. Especially, without more details.

For example, some of the moves in base metals look particularly overextended. Take copper for instance …

Copper is used in everything from building construction, power generation and transmission, electronic product manufacturing, and the production of industrial machinery and transportation vehicles. It should benefit from a massive infrastructure plan and has already seen prices move almost 15% higher since the election.

But we think the near-term party is over. As Larry’s AI chart below clearly shows, copper should make another small move higher before heading lower into earlier April.

Longer term, copper might be worth a look. But at this time, it’s best to stand aside. And this chart proves that.

All told, we think there will be a better time to buy copper and other investments that will benefit from a big infrastructure spending plan.

For now, keep your powder dry and most importantly, be patient. The opportunity to profit is coming.

Best wishes,

Wayne

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Comments 15

  1. Paul Germano March 6, 2017

    Good luck in your new job,Cheers,Paul G -Australia

    Reply

  2. Rod Morgan March 6, 2017

    Wayne
    Thanks for stepping into such large shoes, I know Larry and Martin believes in you. I suspect you were a excellent student of Larry’s. We will mis him greatly

    Reply

  3. CaptTurbo March 6, 2017

    RIP Larry Edelson.

    Reply

  4. Chuck Burton March 6, 2017

    Sorry, Wayne, the chart PROVES nothing. It does indicate that, according to calculations, copper’s price has been continuing to rise, when it should have been falling at least some little bit. That could possibly indicate that it may have a sharper correction than the markets believe, when it does correct. But I wish you well as you take over Larry’s role at Weiss Research. We subscribers are going to miss that man hugely. I’m still digesting his February issue of RWR. He was sometimes off a bit on his timing, but he did call the big trends better than most commentators. Best of luck to you, as you take over the role.

    Reply

    • Chuck Burton March 6, 2017

      Incidentally, that big infrastructure spending plan could be a No-No, when Congress has a choice between infrastructure and defense. Both would create lots of jobs, and infrastructure would be more obvious to voters over time, but defense makes the big headlines, and might be more immediately popular. Like we REALLY need a bigger military, and more wars. As someone pointed out the other day, we already have the TWO biggest air forces in the world, already: the US Air Force, and the US Naval Air Arm. But Mr. Trump seems bent on promoting strife of one sort or another among peoples.

      Reply

  5. Richard B. Brice March 6, 2017

    The Regain Admin. put it to a Vote, to ask the people to vote on a Ten Cent Per Gallon, Gas Tax to repair the Bridges and Infrastructure. It Passed by the Voters, But Reagan’s Chief of Staff, Don Regan Switched it over to the General Fund, and it stayed there from 1984 till 2009.

    I was the one who Advised the President and Bernanke of the Fed. Reserve, first for the President to write an Executive Order to put the Ten Cent per Gallon Gas Tax, back into the Fund that the Voters Approved.

    This was done, this Ten Cent Gas Tax is approved for each of the County’s in the United States, which there are approximately 3500 County’s.

    It was left on the Honor System , because some county’s show a High unemployement which caused by the Ten Cent Gas Tax is being Corrupted, meaning Stolen.

    The way to correct this is to advise each Governor of each State to have an Audit System in place for each Project this Tax Money is being used.
    —————
    EXAMPLE:

    ww-II Ford Motor Company was Building B-24 Bombers for the Army Air Corp, on a 10% Cost Plus Basis. It was not the Honor System, each Bomber had an Auditor on the Job Documenting each employ by name who was working on the B-24, this prevented Corruption.

    , .

    Reply

  6. Mike March 6, 2017

    Fortunately there is no rush for infrastructure spending. Such spending requests have been submitted to Congress over the past six years to no avail. Finding new ways to finance such spending should not be necessary. The old way, used by Eisenhower, involved using taxes to pay for it. That quaint notion was made obsolete by Reagan who used tax cuts to pay for his military build-up. Bush II also used tax cuts to pay for his wars and increased security spending. Obama kept 99% of the tax cuts to maintain the wars and security spending. Going forward Trump’s tax cuts should be made large enough to cover both a military build-up AND infrastructure spending. Things are so simple if you use the Laffer Curve to generate revenue.

    Reply

  7. Darrell Smith March 6, 2017

    I offer my sincere condolences to Larry’s Family and co workers.
    His passing will leave a big hole in countless lives.
    At times like this we are reminded that money and possessions must not be our first priority.
    Jesus said is like this:’what will it profit a man to gain the whole world and lose his soul?”
    I pray that Larry took care of his spiritual life and legacy with the the same meticulous details as he did his financial life.
    May God bless each of you
    Darrell Smith

    Reply

  8. Rashmi Shah March 7, 2017

    Wayne,

    Would like you to consider making changes and add Y axis with price in all charts. This will help your subscribers to get better feel for approx. bottom and top ranges.
    We understand these are just predictions, but it’s better to have numbers from AI model than one thing to guess based on current price.

    Reply

    • Walter Pearce, Publisher March 13, 2017

      Hi Rashmi,

      There’s a very good, albeit technical reason Larry taught Wayne and others NOT to include a Y axis on these charts. He used additional technical indicators to hone in on prices.

      That might be a good article in the future — I’ll mention it to Wayne!

      Reply

  9. Larry March 7, 2017

    Welcome as our new advisor I will miss Larry but if he choose you, you are right for the job of filling his shoes. All the best to his family.

    Reply

  10. DEAN KINE March 7, 2017

    I would like to say I’m really SORRY to hear of Larry’s passing. The main reason I bought a membership in Weiss reports was because of Larry’s reports. May he rest in peace and the rest of family and friends be at peace. God bless you all!!

    Reply

  11. Maria Coke March 7, 2017

    Dear Wayne,

    I wrote a tribute to Larry today. I was deeply saddened by the news of his demise. It was through sheer luck that I discovered him a year ago ( I live in England ), and was immediately impressed with his financial analysis and forecasting.
    Larry is a hard act to follow – but obviously he had put his trust and confidence in you to follow in his footsteps. A great accolade to you – I am sure he had excellent judgement !
    I wish you the very best of luck.

    Reply

  12. irene henle March 10, 2017

    We look to you now Wayne.

    Reply

  13. Jim Welser March 14, 2017

    i’m all for putting money into infrastructure.
    but the world in ignoring the situation in Japan that could literally destroy fishing in the pacific
    an threaten all costal areas. The Fukushima Nuclear plant is on the edge of exploding existing rods an releasing thousands of gallons of radioactive water into the ocean.
    The world need to get together send engineers and equipment to alleviate this situation!!

    Reply