The U.S. stock market has jumped since the November 8th election. We identified 4 initiatives on which the U.S. stock market is speculating to be successfully accomplished early in the Trump administration. What will happen next? It is still to be determined!
The 4 initiatives will have a tremendous influence on the “Heat Map” which forms the basis of our forward looking view of the U.S. economy. I consider the success or failure of the 4 initiatives to be “leading” indicators for the Heat Map.
Below are the 4 Trump administration initiatives upon which the stock market is speculating and what progress, if any, has been made:
- Tax cuts and tax reforms benefiting most individuals and businesses. THE MOST SIGNIFICANT TAX LEGISLATION IN A GENERATION WAS SIGNED INTO LAW LAST YEAR. CUMULATIVE PROGRESS TOWARD GOAL: 100%
- Infrastructure spending of up to $1 Trillion over the upcoming 7 to 10 years. PRESIDENT TRUMP RELEASED DETAILS ON THE INFRASTRUCTURE PLAN LAST WEEK. MANY EXPERTS ARE CONCERNED THE PLAN WILL FALL SHORT OF WHAT IS NEEDED SINCE IT DEPENDS UPON STATES AND LOCAL GOVERNMENTS TO COME UP WITH THE VAST MAJORITY OF INFRASTRUCTURE MONEY. WE ARE DECREASING CUMULATIVE PROGRESS TOWARD GOAL FROM 35% TO 20%.
- Affordable Care Act amendment, reform or reorganization. THE TAX REFORM LAW REMOVED THE REQUIREMENT EACH INDIVIDUAL OBTAIN HEALTHCARE COVERAGE. PROGRESS TOWARD THIS GOAL IS 35%.
- Roll back of government regulations and Executive Orders considered to be difficult for businesses. ROLL BACKS HAVE CONTINUED. CUMULATIVE PROGRESS TOWARD GOAL: 55%
As the action happens in Washington on these 4 initiatives, don’t be surprised if the political “tug and pull” contest results in a wilder than normal stock and bond market.
We will continue to report in future issues on the progress on each initiative.