The speech, delivered to a joint-session of Congress Tuesday night, struck an uncharacteristically measured and optimistic tone and proved the newly minted president can just stick to the script.
He spoke of the dawning of a “new chapter of American greatness” and a “renewal of the American spirit,” adding that “the time for trivial fights is behind us.”
But what was conspicuously lacking from Trump’s address was any detail on the three key areas investors care about – deregulation, tax reforms and infrastructure.
Aside from mentioning a “historic tax reform” currently in development by his economic team and a proposal for $1trn worth of investments for infrastructure spending, the 45th American president was noticeably silent on other solutions currently in the pipeline.
Nor did he provide much clarity on when these reforms would be enacted.
Despite this frustratingly little insight into future policy, deVere Group founder and CEO Nigel Green thinks “investors should react positively to Trump’s address.”
While Trump gave very little away in terms of policy, he delivered a speech with a “Reagan-esque optimistic tone,” Green said, and maintained a pro-business and pro-growth message, which should please international investors.
“The lack of detail craved by the markets should not represent a major, longer-term obstacle to investors,” Green postulated.
“The financial markets like Trump and his economic pledges – we’ve seen this in how they have reacted so far to his stated policies – and a broad strokes speech such as this is unlikely to alter that in any meaningful way.
“Whilst some will, no doubt, bemoan the lack of specifics in Trump’s address, for many savvy investors it is precisely this lack of specifics that has been the cause of so much enthusiasm.”
But by failing to “narrow either the scope or timeframe for policy developments,” AXA Investment Managers senior economist David Page said this could lay the groundwork to “reduce momentum for corporate tax reform.”
He said in a statement: “Trumps speech kept most of the options that we have been considering for US policy developments on the table. This failed to narrow either the scope or the timeframe for policy developments. We continue to be concerned that the replacement of Obamacare will be the key priority and that this may reduce momentum for corporate tax reform.
“We expect a more substantial policy position on Obamacare before the end of the month and Trump has promised greater clarity on tax reform over the coming weeks. The coming month should see the start of preliminary budget discussions as the debt ceiling waiver expires on 15 March.”
That being said, the FTSE 100 appeared to digest Trump’s address to Congress well enough on Wednesday morning, trading up by 0.9% at 7,327.
