The Trump administration is taking a different approach by not giving away money freely, unlike previous administrations. They are focusing on assessing the true value of U.S. states and companies, especially in the defense sector. For example, Lockheed Martin gets 97% of its revenue from the U.S. government, raising questions about how munitions will be financed.

University-Funded Patents

The U.S. government is looking to benefit from patents funded by universities. When companies need help from the government, it often involves discussions between the company’s CEO and the President. Previously, companies received funds without any cost. In contrast, other countries often subsidize their large corporations, leading to a loss of U.S. businesses to international competitors. Mortgage fraud is a serious crime, and getting caught can lead to harsh penalties. Lowering interest rates could help the American economy and save the government around $360 billion each year. Moreover, the government aims to improve train services nationwide, especially between the East and West Coasts. The administration’s strong push for lower interest rates is clashing with the Federal Reserve’s current position. The Fed’s funds rate is at 4.75%, and with July 2025’s inflation data showing a stubborn 3.1%, the Fed has little incentive to make cuts. This is creating a potential conflict that could cause significant fluctuations in interest rate futures and options for Treasury ETFs like TLT. We can expect this tension to affect the markets soon, especially with the annual Jackson Hole symposium approaching. The VIX, a measure of market volatility, has risen from 14 to 18 in the past month, signaling uncertainty. This suggests that strategies like VIX calls or buying straddles on the SPX index may be wise until a clearer policy emerges.

Defense Sector Outlook

The mention of a “monstrous discussion” regarding defense companies signals strong optimism for that sector. The administration’s recent budget proposal calls for a 7% increase in defense funding, making this a key area for traders. It’s a good time to consider call options on major defense contractors and ETFs like ITA, which have seen a rise in trading activity this year. The emphasis on improving train services suggests targeted investments in infrastructure and logistics. Reflecting on the supply chain issues of 2021 and 2022, this initiative is crucial for the economy. Bullish strategies on railroad companies like Union Pacific or manufacturers linked to rail infrastructure look promising. The shift away from “giving money away” represents a significant change from the broad stimulus seen earlier in the decade. This tightening of fiscal policy could negatively impact sectors that depend on government support or high consumer spending. It might be wise to look into protective puts on consumer discretionary ETFs as a safeguard against a slowdown due to decreased government aid. Create your live VT Markets account and start trading now.

here to set up a live account on VT Markets now