“Investors have been viewing Trump as a second coming of Reagan,” the blogger adds. While we’re not there yet, there’s plenty of time for more fireworks, says Macronick. Next would come a reflation reversal for stocks. Then, harking back to the debt-ceiling shock of 2011, a prolonged political upset could start to hit growth and business confidence.

If the Trump administration “overplays its hand,” eroding its relationship with the GOP, its much-anticipated infrastructure spending and tax-cut programs could get delayed or downsized, Macronick says. And “even a garden-variety 5% dip in the S&P would feel pretty vicious,” given the subdued state of volatility over the last two months, the blogger adds. From Macro Man blogger Macronick comes the warning that markets could be headed for an “escalator up, elevator down” selloff. I believe it’s going to be the biggest risk to financial markets in the near future, as we end up with protectionist policies without the implementation of fiscal policies, thus triggering a sharp reversal in stocks worldwide.” Much debate now surrounds just when to start worrying about politics in earnest, and Sayed has one answer: “The major risk looming now is the breakup of the Republican coalition, although this doesn’t seem to be the case for now.

Trump political iceberg image