The Market KnowsWhat the Market Knows, Donald Trump’s Deals are Possible
The financial markets are backing the President Elect’s blueprint to make America Great Again.
The financial markets are saying loud and cleat that President Elect Trump’s deals are all possible
For those who think compromise is in the air, the markets have told us that a large part of the Donald Trump agenda is being priced in to individual stocks and the broader market.
The message of the markets is clear, passing the Trump Agenda, much like his candidacy, is not only possible, but a new reality.
The spike in stock indexes, including 2 consecutive record highs for the DJIA; the run-up in banks, financials, pharma and bio-tech; the explosion in the price of Copper; the spike in interest rates and the slump in emerging markets, all say that investors are making big bets that a Republican President, and Republican Congress, will move swiftly to enact as much of candidate Trump’s agenda as fast as possible.
Expect the 1st thing that President Trump will do is reverse many/most of President Hussein Obama’s executive orders. He can also roll back specific regulations, like the Department of Labor’s Fiduciary Standard rule for financial advisers.
That rule requires FA.’s to put a client’s interests before his, or her, own; offer greater transparency on potential conflicts of interest and disclose more about how they are compensated when selling specific products.
The rule, opposed by the financial services industry could have been a profit-limiting regulation, which is now expected to be among the 1st regulations removed from the books.
Also, “A large-scale tax cut is now possible, which would comprise lower corporate and individual tax rates, lower capital gains and dividend taxes while the estate tax may well be eliminated,” TV commentator Ron Insana said.
Comprehensive tax reform could include repatriation “Holiday” for corporations that hold a significant cash pile overseas. The proceeds of those repatriated taxes could be used to fund infrastructure programs, hence the jump in the price of Copper and heavy industrial stocks.
Warren Buffet came aboard last week and urged Americans to rally around Donald Trump, saying the President Elect “deserves everybody’s respect.”
“I support any President of the United States. It is very important that the American people coalesce behind the President,” Mr. Buffett said in a TV interview
“We need our country unified,” Mr. Buffett added.
Have a terrific week.