Week in Review : So here's where it could have begun to fall apart. It's not that this is the first time the chinks in the armor appeared; nope, those have been on display for quite some time. This week may have been, however, the first time the markets may have taken notice because there was enough to digest on Thursday afternoon, to make a judgment upon, for it was the first Presidential Press Conference of the Trump administration. In the aftermath, nervous investors would postulate as to whether the muted decline in the indices were coincidental with the spectacle of what rational people can only view as irrational behavior at the lectern or nothing more than a consolidating market after a record run. It didn't take long for a verdict to be rendered as Friday's follow-up signaled business as usual in the era of the Trump Presidency – all that matters is what matters to markets – as the day began slightly in the red with losses moderating as trading wore on, final direction determinable on the close due to options expiration but likely meaningless either way. In between were the comments at Boeing's facility and they were – well, Presidential and on point. Put into perspective, the S & P rose 2.5 percent over the previous 7 trading days adding to their year-to-date gains and fueling competition with passive investors for assets exhibiting outperformance versus the market, a result of correlations breaking down for the first time in – well, years, actually. So if the indices give up a little ground, who cares? With others in the White House, it would be called healthy; with Trump it is an ominous sign of the administration falling apart and stock market Armageddon. Not yet. Observations: Underneath the top line indices, the rotation was very apparent: not the traditional cyclical rotations among sectors but rather "who will Trump invite into the White House next?" The thought process is not one CEO has exited a meeting without heaping praise on the President, hopeful that they impressed upon him the need for reform that will bolster their prospects or dissuaded him from changes that will do the opposite. It is a true come together moment as the President returns the compliment. Charmed, believing they have impressed upon the President why they should not be targeted or why they should be lifted, their stocks begin to rise. That's what drove the healthcare sector's recovery; that and historically low valuations. The Presidential plate is too full and the activity too quick for the markets to fixate on one sector so it moves onto the next in lockstep with his calendar. And then there is the Fed and Janet Yellen doing their part. We have observed many times that (a) if rates rose for the right reasons, such as an improving economy, then the market will move higher in unison with yields and (b) we anticipate three Fed hikes this year. Neither the markets nor Chairwoman Yellen's testimony dissuaded us from those presumptions. In fact, regarding (a), history is our guide, not to mention that rates will still be incredibly accommodative. Outlook: A week or two left and counting for that is when we were promised a "terrific" tax plan or at least a look into what the rollout will be. No use betting against this deliverable since Trump has lived up to executing the campaign promises he made to his constituents. This is one that the indices have already put their money on but not all of it since for all the talk of a Trump bubble, I don't see it. Earnings are growing, inflation is picking up – all good signs. Not to say the market is cheap, it isn't, but nor is it expensive. However, not one economic report that has been released since he took office that is indicative of a burgeoning economy is a product of any of his policies. Those are yet to come which should make anyone optimistic on further gains in equities and further damage in bonds. Of course there will be a correction at some point and if he falls down on his commitments, then it could be a fast, steep trip down. In days of yore when I had way too many people reporting to me at Salomon Brothers and Lehman Brothers, there was always someone who you tolerated. They were the uber producers, quirky but not in a curious way, rather in an off-putting manner. As long as they weren't culture killers and not too offensive, you found a way to tolerate them. But once their production fell off, the sword fell swift and, admittedly, with a sense of relief. That's the deal we have here. As long as President Trump delivers on pro-business initiatives, we will all look past the un-Presidential behavior and irrational commentary but once his execution falters, the market will be as unforgiving as – well, as I was. (Mr. Weiss is the managing partner of Short Hills Capital Partners, a hedge fund advisory firm and asset manager primarily established to invest on behalf of one of the industry's most successful hedge fund managers. He has held senior management positions at SAC Capital, Salomon Brothers, Lehman Brothers and MSW Asset Management. He is the author of two investment books and a novel, is a visiting teaching fellow at UNC's graduate business school, Kenan-Flagler, and a CNBC contributor appearing regularly on "The Halftime Report.")
