There can be little doubt that the recent election of Donald Trump as the 47th President of the United States has unleashed a fair degree of animal spirits in the financial markets and in corporate America. Some of this could simply be a function of the fact that a chaotic and sometimes frightening election is now over.
Two assassination attempts and having the primary candidate for one of our two parties drop out of the race a little more than 100 days before the election is a chain of events that would be considered implausible even by the standards of Hollywood. Still, higher stock prices, lower bond yields, and a stronger dollar since the election all suggest that the newly-elected President’s policies are being greeted warmly by investors at home and abroad. For the most part, President Trump’s economic agenda for his second term is not all that different than what was sought in his first term – deregulating the financial and energy industries, keeping or even further lowering corporate tax rates, and pursuing reciprocity when it comes to trade.
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