When Donald Trump took over as the 45th President of the United States, expectations were that the stock market would crash amid the unpredictability of a first-time politician taking the highest political post in the land. But that didn’t happen. In fact, under Trump, the stock market has thrived, with the Dow Jones breaking records and achieving never before seen closes over 21,000 points. However, as all good things must come to an end, has Trump Trade done just that? Concerns over delays in Trump executing his promises have traders worried. Are those concerns justified?
What is Happening to Trump Trade?
Markets across the world dropped as all eyes were on the U.S. European and Asian markets dropped as they were dragged down by Wall Street showing weakness and suffering its worst day of losses since Trump’s November upset win.
The cause of the drop? The same cause for the rally — Trump himself.
While Trump’s promises, actions, and executive orders lifted the markets to new heights, the reality of executing those promises is turning out to be more difficult than the president (and traders) expected.
Trump rallied the market under several promises. Specifically, he focused on infrastructure spending, tax cuts, and healthcare reform. But Trump’s economic growth agenda hasn’t exactly soared. With his healthcare reform plan, the America First Health Plan known as Trumpcare, struggling to garner support even among House Republicans, repealing and replacing the Affordable Care Act doesn’t look to happen anytime soon.
That’s a huge problem for Trump, and a big reason the markets dropped.
Shock Report! Gary Cohn & Wall Street wing of Trump Administration trying to torpedo meaningful trade reform! https://t.co/eT4yufruSZ
— Trumped Up Trade (@TrumpedUpTrade) March 18, 2017
Investors are concerned he can’t carry out his promises. And if he can’t carry out his promises for health care reform, what’s to say that the wall gets built? Or that tax reform happens? Or even infrastructure spending?
These promises were meant to stimulate the economy. The stock market is a manifestation of the short-term vitality of the economy, and if it struggles, that’s a sign the economy may not be doing quite as well as hoped. That’s why not passing Trumpcare matters.
One solution the president should utilize is to go after the low-hanging fruit. In this case; infrastructure spending. Both parties are in favor of rebuilding our nation’s infrastructure. It would provide jobs, improve efficiency and transportation, and bring in revenue from toll roads. By going after a nonpartisan issue, Trump can build a little momentum and boost the economy, thus driving up the markets.
Let's take a look at this video of the reassessment of Trump Trade from Financial Times:
However, if Trump can’t push any of his policy promises through, expect the markets to continue to dip back down.
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