All eyes are fixated on Trump’s maiden address to Congress on Tuesday. Till date, Wall Street is in jubilant mood since the victory of Trump on November 8th. S&P 500 has gone up by 10% since then and Dow Jones closed at record highs. The corporates are optimistic that the Republican President will go for tax reforms that will help them in the long run.
Till now, all that investors were betting on his campaign promises of a pro-growth agenda. The moment it was official that Trump will be the new President of the United States dollar started surging, stocks markets started closing at record highs and the bond yields started climbing.
Now comes the time when he will actually address not only the House of Representatives and Senate, but also Supreme Court justices and his own cabinet and trillions of dollars are at stake on this maiden speech of his. It is the time when he will actually lay out what his legislative priorities will be and a clearer picture will emerge if those are in line with his campaign promises.
Sean Simko, who works at SEI Investments Co. in Oaks, Pennsylvania and manages a fund of $8 billion, said – “We need to see some details within all the policy talk. More specifics in terms of numbers or even a more defined timeline. If there aren’t specifics there, the risk trade might be ending.”
Most of the investors echo this sentiment of Sean. They are of the opinion that if he gives vague plan or if his plans are slow to execute then the economic agenda flames that took Wall Street indexes to new highs will douse.
The chief market strategist at TD Ameritrade in Chicago, JJ Kinahan said, “If he comes out next week and there are little or no details other than that it is going to be great, that is going to be a time where we could have the first sort of crack in the armour.”
The White House confirmed that the theme of his address would be “The renewal of the American spirit.” Steven Mnuchin, the Treasury Secretary of the US also assured that the President will touch the tax reforms part in his speech. If the speech gave any indication that Trump won’t be able to deliver on his promises the analysts feel that market will immediately correct by at least 5 percent.