Mark Cabana - Bank of America Merrill Lynch

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Last quote by Mark Cabana

It sapped a lot of the optimism that this was going to be easy and that the Republicans were going to be able to use their clean sweep to quickly pass legislation.feedback
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Apr 26 2017 Trump Presidency
I don't think much of the move is related to renewed optimism over the tax plan. There's still an expectation that there's a long way to go on this plan. We expect to see essentially the outlines of the broad strokes they would like to have, but not too much details. That leaves a lot of room for negotiation that will be needed between the White House and Congress.” said Mark Cabana on this article: Earnings could keep momentum going even if Trump's 'massive' tax plan is a letdown. This page contains 15 articles quoting Mark Cabana. Main topics on which Mark Cabana is quoted are House and Republicans. In addition you’ll find 29 quotes there. All these quotes are mentioned on this page and you can filter them by date and by topics.
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Mark Cabana quotes

It's a pretty big one. I think you'd see equities sell off, yields decline, dollar potentially weakens. The market would certainly welcome him [Mnuchin] front-running it. The market's looking for any kind of clarity. It seems Trump, Mnuchin, Gary Cohn or Paul Ryan are the ones the market is looking to, to get some clarity.feedback

He has discussed that in the past so certainly any guidance he can give on debt management issues and what changes, if any will be forthcoming. Even if Treasury keeps their funding mix unchanged, the average maturity is going to extend. It's not too terribly controversial to see if he was going to extend the average maturity. What would be more controversial to the bond market would be if he is going to discuss reallocation going from the front end to the long end. He basically suggested that he would like to consider increasing the average maturity of the debt back in November.feedback

I think certainly tax reform is going to be the top question for him. I would want to know what the timeline looks like. How's the White House working with Congress? How's Congress working with itself in terms of progress? It seems the sticking point is how tax reform will be paid for, so I want to know what is the current thought on the border-adjustment tax.feedback

She certainly wanted to give herself the option of going in March if the data does reflect that. I think she might be thinking that the market was a little too pessimistic on that potential.feedback

That probably achieved what she was thinking in trying to get the market a little more cognizant. It doesn't seem like she was pushing so hard on that notion and would rather wait to see how incoming data looks and see if that's something the Fed needs to do.feedback

You really did see the market pretty much retrace the front end of the rates curve of what was priced in after that ADP report. Maybe they were thinking the Fed would trust ADP as a reliable indicator of underlying economic growth and maybe come out and be a little bit more hawkish. The Fed clearly chose not to do that and not to provide a signal for March. I think some people that were playing for that were a little disappointed.feedback

In terms of what's known on the calendar, the other thing that will be quite meaningful is [Fed Chair Janet] Yellen's [congressional] testimony and the Fed minutes the week after that. Outside of that the thing the market is going to be quite focused on is political developments in the near term and how likely fiscal stimulus will be.feedback

If they were unhappy with where the market was priced for March right now, they could have chosen to adjust their tone a little bit, but given they decided not to, that indicates they are pretty comfortable given where the markets are for March. Let's see what happens Friday. If the data is really strong, that could convince the Fed to put March in play.feedback

We're setting up for some showdown in the Senate with Cabinet-level confirmation hearings. That has reduced slightly some of the optimism that we would see something happen quickly in the second half of the year.feedback

We are in a big wait and see mode as to how policy will be implemented in the near term.feedback

The pace of implementation is now beginning to be questioned to some extent, and I don't think anyone is really doubting we will get tax reform or fiscal stimulus, visa vis lower tax rates. There may be some defunding, but there's not a clear path of what it will be replaced with.feedback

The speed of the move has been a little surprising. That said, there's certainly risks to the upside from here. We prefer to just wait and see ultimately how the fiscal policies will shake themselves out, and just wait to see how the growth outlook begins to materialize in the first half of the year before we look to revise them.feedback

This should increase the estimate of the deficit. One of the scorers estimated Trump's plan could add $5 trillion to the deficit. We seriously doubt that. You do have deficit conscious hawks in the House, which will try to limit anything that materially adds to the deficit.feedback

I think there's a fundamental rethink in the near-term outlook, as it relates to expectations for growth and also (Federal Reserve) policy. All of this has to do with increased optimism that there will be some fiscal stimulus in the near term and some type of deregulation, both of which will underpin growth.feedback

Maybe that would have been 10 to 15 basis points. Nothing like this kind of move we've made. It's because you would have (had) continued gridlock in Washington. The Republicans would have continued to hold the House and that would have been a continued gridlock.feedback

We do think all of this means the Fed will likely have to be more active. We are going to hear from Chair (Janet) Yellen this week. She is likely to reiterate a December hike is on the table, and any type of fiscal stimulus will be well received.feedback

At 2.5 (percent on the 10-year), we might start to begin looking to fade. We might see a level around there as fair.feedback

First, a flight out of gilts by risk-averse foreign investors should benefit Treasurys ... second, attracting global liquidity when real rates are constrained and monetary policy is considered ineffective is not good news for inflation expectations.feedback

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