The Trump Presidency – Monitoring the First 100 Days
Today is an historic day, as Donald Trump will be inaugurated as the 45th President of the United States. Since winning in surprising fashion this past November, Mr. Trump has released policies that may have positive implications for both the U.S. economy and equity markets. This propelled equity markets to all-time highs, with the Dow Jones Industrial Average and S&P 500 indices returning between 5-7% to the end of the year, while bond markets declined due to a spike in interest rates (see Chart 1).
Chart 1
However, equity markets have been more measured as we head towards the inauguration (see Chart 2). This includes interest rates and the U.S. Dollar, which have declined in January after a strong rally post-election. This has helped International Equities outperform the U.S. market over the past few weeks.
Chart 2
It remains to be seen how many of Mr. Trump’s policies can be implemented through his first 100 days. Below are several we will be monitoring due to their near-term impact on economic and market conditions:
-Reduction of both Individual and Corporate Tax Rates
-Infrastructure spending bill
-De-regulation of financial industry
-Repeal of Affordable Healthcare Act (Obamacare)
-Increase of tariffs on goods made outside of U.S. (potentially negative impact on trade)
Implementing policies to increase fiscal spending, cutting taxes and de-regulation may push equity markets past their recent all-time highs, while helping the economy break through the low growth environment we have been in since the end of the Great Recession. However, it may come at the cost of inflation and higher interest rates over the long term. This level of uncertainty as Trump takes office is expected to weigh on market returns over the next 3-4 months.
As we have discussed in previous blogs, the overall economic climate has been improving even before the Presidential election, which may continue to be a tailwind for U.S. equities. We will continue to monitor current environment to see if some of his policies come to fruition.
IMPORTANT DISCLOSURE INFORMATION
Please remember that past performance is no guarantee of future results. Different types of investments involve varying degrees of risk, and there can be no assurance that the future performance of any specific investment, investment strategy, or product (including the investments and/or investment strategies recommended or undertaken by Bouchey Financial Group, Ltd. [“Bouchey Financial”]), or any non-investment related content, made reference to directly or indirectly in this blog will be profitable, equal any corresponding indicated historical performance level(s), be suitable for your portfolio or individual situation, or prove successful. Due to various factors, including changing market conditions and/or applicable laws, the content may no longer be reflective of current opinions or positions. Moreover, no portion of this discussion or information contained in this blog serves as the receipt of, or as a substitute for, personalized investment advice from Bouchey Financial. To the extent that a reader has any questions regarding the applicability of any specific issue discussed above to his/her individual situation, he/she is encouraged to consult with the professional advisor of his/her choosing. Neither Bouchey Financial’s investment adviser registration status, nor any amount of prior experience or success, should be construed that a certain level of results or satisfaction will be achieved if Bouchey Financial is engaged, or continues to be engaged, to provide investment advisory services. Bouchey Financial is neither a law firm nor a certified public accounting firm and no portion of the blog content should be construed as legal or accounting advice. A copy of the Bouchey Financial’s current written disclosure Brochure and Form CRS discussing our advisory services and fees is available for review upon request or at www.bouchey.com. Please Note: Bouchey Financial does not make any representations or warranties as to the accuracy, timeliness, suitability, completeness, or relevance of any information prepared by any unaffiliated third party, whether linked to Bouchey Financial’s web site or blog or incorporated herein, and takes no responsibility for any such content. All such information is provided solely for convenience purposes only and all users thereof should be guided accordingly. Please Remember: If you are a Bouchey Financial client, please contact Bouchey Financial, in writing, if there are any changes in your personal/financial situation or investment objectives for the purpose of reviewing/evaluating/revising our previous recommendations and/or services, or if you would like to impose, add, or to modify any reasonable restrictions to our investment advisory services. Unless, and until, you notify us, in writing, to the contrary, we shall continue to provide services as we do currently. Please Also Remember to advise us if you have not been receiving account statements (at least quarterly) from the account custodian.