Quarterly Briefing: Trump vs. Elon — The Fiscal Showdown That Could Shake the Market

🧠 Quick Take: Why This Matters for Traders

We have a political showdown in full effect. It’s not just about power — it’s about money, markets, and the future of the economy. Former President Trump is pushing for a massive spending bill. Meanwhile, Elon Musk is leading the charge against it. Their clash is spilling into the financial markets, creating uncertainty across everything from gold and the U.S. dollar to Tesla stock and the energy sectors.

If you're learning how to trade, this is one of those "watch and learn" moments. Political decisions can move markets. Let's break it down.

🏛️ The "Big Beautiful Bill": What's In It?

Trump is proposing a major piece of legislation that would:

• Make his past tax cuts permanent

• Raise the U.S. debt ceiling by $4 trillion

• Cut funding for Medicaid, food stamps, and clean energy programs

• Boost spending on fossil fuels, the military, and corporate tax breaks

  
  

⚠️ Impact of the Bill

This legislation could have significant repercussions:

• It adds over $3 trillion to the national debt over the next decade.

• The benefits largely favor higher-income earners.

• The bill may harm rural hospitals, the elderly, and low-income families.

  
  

⚡ Elon Musk Fires Back

Elon Musk, the billionaire behind Tesla and SpaceX, is slamming the bill. Here’s what he’s saying:

• It helps the rich and hurts the poor.

• It diverts funds from clean technology to oil and gas.

• Musk warns of potential long-term damage to America’s economy.

  
  

Musk is now:

• Threatening to fund challengers against any Republican who votes in favor of the bill.

• Backing Senators like Rand Paul and Thomas Massie, who oppose the legislation.

• Considering forming a third political party — “The America Party.”

  
  

🔥 Trump Responds with Threats of His Own

Trump fired back, claiming Musk owes much of his success to government subsidies. Reportedly, his allies are working to:

• Strip Tesla and other clean-energy companies of up to $1.2 billion in tax benefits.

• Push new rules that would defund clean technology, including electric vehicles (EVs) and solar projects.

  
  

This is no longer just politics — it's personal, and it’s hitting the markets.

📉 Market Reactions So Far

The Trump-Musk feud has triggered significant market reactions:

• Treasury yields are rising, as more government debt means higher interest rates.

• The U.S. dollar is falling due to uncertainty and spending risks.

• Gold is rising, as investors seek safer assets.

• Tesla shares have dropped 5% in just one week due to political pressure.

• Oil and fossil fuel stocks are gaining as clean energy faces setbacks.

  
  

💡 Macro Trends & Trading Takeaways

💵 Bond Market Impact

Expect higher yields as the government prepares for more borrowing. Monitor 10-year Treasury auctions for insights.

🧨 U.S. Dollar Performance

The dollar is under pressure from fiscal risks. If political tensions escalate, anticipate short-term weakness in the USD.

🪙 Gold & Cryptocurrency

Safe havens are proving stronger. Recently, gold surpassed $2,300 and may test $2,400 soon. Cryptocurrencies could mirror this movement.

🌱 Clean Energy Sector Vulnerability

The solar, EV, and ESG sectors are susceptible. A potential rollback of climate programs backed by Trump might deter investment in these industries.

📊 What Traders Should Watch Next

Here are important factors to observe:

1. Senate Decisions This Week: Will key Republicans change their stance on the bill?

2. Musk’s Moves: Watch for news regarding PAC funding or the formation of a new political party.

3. Federal Reserve Speeches: Any hint at rate cuts or a dovish pivot could impact markets.

4. Treasury Reports: Updates on debt issuance will influence yields.

5. Clean Energy Stocks: Expect volatility as policy changes loom.

6. Swing-State Politics: Resistance to Medicaid and hospital cuts may shape the narrative leading to the 2024-2025 election.

   
   

🧠 For Our ITU Traders: How to Navigate the Next 2 Weeks

As we move into July, expect heightened market volatility—especially in technology, energy, and precious metals. Here’s how to stay sharp:

1. Avoid Overexposure to Politically Sensitive Stocks

   Stocks like Tesla and solar companies may swing wildly. Manage risk by using stop-loss methods and consider smaller positions if volatility spikes.

   
   

2. Monitor News Before Trading

   Major market movements can happen quickly with news releases. Always check the headlines before each trading session.

   
   

3. Focus on Gold and Dollar Opportunities

   If the dollar weakens while gold rises, look for breakout opportunities on gold pairs (e.g., XAU/USD) and other metals.

   
   

4. Utilize Event-Based Trading Smartly

   Important events such as FOMC speeches, bill updates, and Senate votes will serve as catalysts. Plan your trading strategies around them—if uncertain, consider sitting out.

   
   

5. Practice Patience and Process

   The markets may experience choppy movements during periods of uncertainty. Stick to your trading plan, document your trades, and avoid emotional responses to headline risks.

   
   

✍️ In Simple Terms…

Congress is debating a significant new law that could cut healthcare and clean energy while providing tax breaks for the wealthy. Elon Musk opposes the plan and is fighting vigorously against it. A victory for him could alter election outcomes and influence U.S. spending priorities. This could lead to rapid shifts in the stock market, gold prices, and even the U.S. dollar. For now, be cautious, stay informed, and safeguard your investments.

📢 Final Word from Michael Franz

"This isn’t just a political debate—it’s a macro storm that will test your discipline as a trader. Stay grounded. Stay prepared. Let your edge—not your emotions—guide you."

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