Go figure the so-called Trump Trade. A sure bet in the weeks after the U.S. election, and then something to bet against in the weeks following President Donald Trump's inauguration. But wait: Then the fade faded and once more the trade paid. It's a head scratcher.
Alright, so where are we? This week marks 75 days since Trump's inauguration and the list of accomplishments is less than "yuge." There's nothing yet on the big-ticket promises investors care about such as health care, taxes, trade, or infrastructure.
But what did Barack Obama say about the audacity hope? "Hope in the face of difficulty. Hope in the face of uncertainty."
Nobel Prize-winning economist and Yale professor Robert Shiller has argued the Trump rally has more room left to run. Analyst and former U.S. Treasury senior official Stephen Myrow agreed, telling CNBC "tax reform still has its best chance in a generation of being realized."
"He's got to deliver something," said Kumar Palghat, managing director of Kapstream Capital, in an interview with CNBC's "Street Signs" on Monday.
Palghat is no Pollyanna and he echoes conventional wisdom: If the Trump Trade fades and then fails, markets will indeed be disappointed. Goldman Sachs is among those forecasting a correction, although the bank's chief global equities strategist, Peter Oppenheimer, noted it won't turn the horns on the bull market. Gabriela Santos, global market strategist at JPMorgan Asset Management, advised investors to keep looking at risk assets, but to be selective. As for Palghat, he's looking at the road ahead, and he's not blinking.
"On the medium-to-longer term, I think you should still be bullish risk assets," he said. "There'll be some sort of delivery from the Trump administration — and this is just a hope — whether it comes from corporate taxes or infrastructure or trade."
Palghat, whose main fund manages 10 billion Australian dollars ($7.61 billion) and has delivered an annualized return of 5.8 percent for clients, said that in the "very, very short term" he's a bit worried about the level of equity markets and that too much good news has been priced in.
"I think you might get a disappointment," he acknowledged. "But if you do, you have to buy it because at some point I think you'll get something out of the Trump government."