Trump's America

Anyone who has doubts about the American economy’s recent state must clearly not have followed any news in the past months; all events and economic data since Trump’s election point to a general state of well-being and even prosperity. However, some of that hype is riding on Trump’s campaign promises. So after the first 100 days of his presidency, how close are we to seeing his goals materialize? Probably not that close, it turns out. In a recent statement, spokesperson Sean Spicer said regarding Trump’s tax reform that they want to “do it right,” implying it might not be ready by August, which was the initial expectation. Mulvaney, another key figure of Trump’s administration, also stated that the Federal debt cannot be eliminated in four year’s time, contrary to Trump’s promise. China is yet another cornerstone of Trump’s campaign. For the past two years, at least, Trump had claimed that China is able to make itself an attractive trade partner because it keeps its currency low on purpose, contrary to the strong dollar. After meeting with the Chinese president last week, Trump curiously stated the complete opposite of that. Healthcare is also an issue; Trump won over many Republican voters with claims that he would replace Obamacare with something much better. His only proposed plan failed miserably just a few weeks ago and didn’t even gather enough support from Republicans. Instead of moving onto other issues, Trump now seems to be fixated on healthcare, placing other issues on hold. Perhaps one of his most important ideas, which gave a strong drive to the stock market, is Trump’s intention to invest in infrastructure. Mulvaney, however, stated that the government is currently planning to spend only about 20% of what Trump promised. These failures to act on the policies Trump said he would enact, as well as the contradictory statements he’s been making of late regarding many issues, including the war in Syria and the Federal Reserve’s regulation of interest rates, are causing the markets to slow down. Stocks are not doing so great and we see an increased interest in gold and bonds. Donald Trump has also done something that’s been out of style for American presidents for decades - he’s developed a habit of talking about the dollar. Traditionally, US leaders refrain from comments or make vague statements about supporting a strong dollar - they generally try to stay out of the markets’ work. However, Trump has stated multiple times that he has a problem with the trade deficit of the US, which is to a certain extent impacted by the strong dollar, making it hard for the US to compete with other exporters whose currency is a bit cheaper. In his attempt to counter this, Trump keeps commenting that the dollar is “too strong” and that he hopes to see it weaken. Still, those statements are based on his hopes, not on actual important data; the US economy is doing well and the dollar is likely to keep reflecting that. Overall, it seems that we may see some stagnation on the stock market as it adjusts to Trump’s troubled presidency. The USD is doing well regardless of that, at least so far, but while baseless comments can’t affect it, serious actions (like going to war) can, so traders need to stay alert about major news.