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Immigration ban ends Donald Trumps stock-market honeymoon
The Trump rally may have more room to run, but investors were put on notice Monday that the path higher might no longer be so smooth.
The weekend chaos and backlash that followed President Donald Trump’s signing of an executive order late Friday temporarily restricting immigration from seven Muslim-majority countries was blamed for a “risk-off” reaction across global financial markets, undercutting equities, including U.S. stocks, while bolstering assets viewed as traditional havens, including gold, the Japanese yen and, for a while, U.S. Treasurys.
The downturn wasn’t devastating, but it was the first time equities saw a sizable retreat in response to Trump’s actions. Analysts described it as a warning against complacency to investors who had previously focused on the upside implications of Trump’s policy agenda.
“We’re just a few days into this presidency and yet virtually all our clients have expressed concern the Trump White House has spent way too much political capital forging ahead with a wall across Mexico’s border and on defending the order to block U.S. entry of immigrants from several Muslim countries,” wrote Bernard Baumohl, chief global economist at The Economic Outlook Group, in a note.
The crucial question for investors is whether resistance to Trump’s less market-friendly policies could make it more difficult for him to enact the tax cuts, deregulation and infrastructure spending that’s fueled the postelection rally.
“For these current market prices to be justified, the Trump agenda must unfold perfectly,” said David Kotok, chairman and chief investment officer at Cumberland Advisors, in a Sunday note. “But the reverse is under way, and fragmented policy combined with obfuscation is now a growing detriment to growth acceleration.”
http://www.marketwatch.com/story/the-immigration-ban-just-ended-donald-trumps-stock-market-honeymoon-2017-01-30
The weekend chaos and backlash that followed President Donald Trump’s signing of an executive order late Friday temporarily restricting immigration from seven Muslim-majority countries was blamed for a “risk-off” reaction across global financial markets, undercutting equities, including U.S. stocks, while bolstering assets viewed as traditional havens, including gold, the Japanese yen and, for a while, U.S. Treasurys.
The downturn wasn’t devastating, but it was the first time equities saw a sizable retreat in response to Trump’s actions. Analysts described it as a warning against complacency to investors who had previously focused on the upside implications of Trump’s policy agenda.
“We’re just a few days into this presidency and yet virtually all our clients have expressed concern the Trump White House has spent way too much political capital forging ahead with a wall across Mexico’s border and on defending the order to block U.S. entry of immigrants from several Muslim countries,” wrote Bernard Baumohl, chief global economist at The Economic Outlook Group, in a note.
The crucial question for investors is whether resistance to Trump’s less market-friendly policies could make it more difficult for him to enact the tax cuts, deregulation and infrastructure spending that’s fueled the postelection rally.
“For these current market prices to be justified, the Trump agenda must unfold perfectly,” said David Kotok, chairman and chief investment officer at Cumberland Advisors, in a Sunday note. “But the reverse is under way, and fragmented policy combined with obfuscation is now a growing detriment to growth acceleration.”
http://www.marketwatch.com/story/the-immigration-ban-just-ended-donald-trumps-stock-market-honeymoon-2017-01-30
