President Trump to address congress later today
President Trump will speak to congress later today in a move that is widely believed to rival a traditional State of the Union address, when it comes to importance. The reason this speech is so important is a reflection of the meteoric rise of markets since the President’s election, and the relative uncertainty that still clouds future policy.
Stocks are at record highs, having shown only the most marginal of wobbles over the past three months. When reflation began to falter earlier this month, the President’s promise of a “phenomenal” tax plan kicked it back into gear. However, as has been the case thus far with the new administration, he was light on the details.
Trump’s election instantiated a rally that has added $2.8 trillion to the U.S. equity market, added 10% to the S&P 500, and seen the posting of 17 record closes to the market. While some of this growth has to be seen as the natural reaction to strong fundamentals – the U.S. labour market, for example, improved steadily under President Obama – that doesn’t tell the whole story. Traders have bought into Mr. Trump’s promises of high-growth policies, including financial deregulation.
This combination of impressive growth in the market and lack of clarity over the details in what’s causing it is why Trump’s address has taken on such an air of importance.
Quincy Krosby, market strategist at Prudential Financial Inc., said: “it’s possible that if the market hadn’t been rising so dramatically, we could wait. But this is a market that’s pretty impatient and wants results.”
Other areas that are expected to feature are new tax policies and a healthcare overhaul.
The opinions in this article do not reflect those of Dominion Fund Management Limited, and in the instance of any forward-looking statements, these should not be construed as advice.
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