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Investing

TRUMP’S JOINT ADDRESS: INVESTORS SHOULD LOOK OVER LACK OF DETAIL

TRUMP’S JOINT ADDRESS: INVESTORS SHOULD LOOK OVER LACK OF DETAIL

The markets might not have been given the details they wanted, but investors should react positively to Trump’s address, affirms the founder and CEO of one of the world’s largest independent financial advisory organizations.

deVere Group’s Nigel Green comments come immediately after Donald Trump delivered his first address to both houses of Congress Tuesday night.

Mr Green comments: “President Trump’s joint address had, in general terms, a Reagan-esque optimistic tone.  It was by far his best and most presidential speech to date.  It was almost as if tonight Trump became the President of the United States.

“Overall, there was a positive, pro-business and pro-growth message that will please the markets.

“However, there was a marked lack of detail on tax reforms, deregulation and infrastructure – three key areas for investors – and this could dampen the markets’ mood somewhat.

“The markets were hoping for a laundry list of facts on tax reform, deregulation and on stimulus. This didn’t happen and this will be a disappointment. Such cold, hard facts would have certainly maintained the post-election stock rally and expectations that the economy will get a further boost.”

He continues: “Although Trump didn’t use the joint address to get into the details, it does not mean that the details are not coming imminently. Indeed, he said that his economic team is working on a ‘historic tax reform.’  The Trump administration has also previously said it is their goal to pass tax reform legislation by August.

“The lack of detail craved by the markets should not represent a major, longer-term obstacle to investors.

“The financial markets like Trump and his economic pledges – we’ve seen this in how they have reacted so far to his stated policies – and a broad-strokes speech such as this is unlikely to alter that in any meaningful way.

“Whilst some will, no doubt, bemoan the lack of specifics in Trump’s address, for many savvy investors it is precisely this lack of specifics that has been the cause of so much enthusiasm.”

Mr Green concludes: “The markets might not have been given the details they wanted, but investors should react positively to Trump’s address.

“He seems determined to fulfill his election promise of shaking up the status quo.  From this shift there will be winners and losers, of course.

“For instance should Trump hold true to his election pledges, the banking sector is likely to do well due to the lifting of regulations, and mining and oil will get a boost the repeal of some the Obama-era environmental laws.

“In this new era, investors will need good fund managers who select investments that aim at the winning sectors, taking care to be diversified in their overall structures.”

Global Banking & Finance Review

 

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