Watch Out for the Trump Economic Slump

Watch Out for the Trump Economic Slump By Investors like predictability. Markets may
be volatile but so long as they have a means of predicting where the market is going investors
are generally happy. Such has been the case with the Trump bump, the stock rally based
on the expectation of lower taxes, less regulation, repatriated corporate offshore cash and infrastructure
spending. After all the USA has the same party in control of the White House and both houses
of congress. Unfortunately, when the same party has all of the control they tend to
fight among themselves such as happened in the Carter years when Jimmy Carter referred
to congress as an albatross around his neck. The Republican controlled congress was going
to repeal the Affordable Care Act, better known as Obama Care but they could not get
the votes to do what they have been promising for seven years and what Trump promised to
do immediately upon assuming office. Now we need to watch out for the Trump economic slump
as investors wonder if the Obama Care repeal debacle is a hint of things to come when congress
addresses Trump’s economic agenda. Trump Slump The stock market rally after the Trump election
has been referred to as the Trump bump. Now Reuters writes about the Trump slump of the
dollar and stock prices. The dollar and share prices tumbled on Monday,
as investors worried that U.S. President Donald Trump’s defeat over healthcare reform foreshadowed
difficulties delivering other key campaign promises, in particular fiscal stimulus. Trump’s failure to rally enough support from
his own Republican party – which controls both houses of U.S. Congress – to repeal and
replace Obamacare spurred a rush to safe haven assets such as gold XAU=, the Japanese yen
JPY=and the Swiss franc CHF=. Bets that pro-business policies promised by
Trump would boost growth and consumer price rises after years of very low inflation, leading
to a faster pace of U.S. interest rate rises, took stocks to record highs earlier this year
and the dollar to its highest levels in 14 years. But those “reflation trades” have since come
under selling pressure as Trump has concentrated his efforts on areas other than economic reform,
and that selling intensified after the healthcare bill’s failure late on Friday. The markets have suddenly become much more
risk adverse and that could intensify the downward trend so watch out for the Trump
slump as you consider your portfolio. What to Sell ASAP CNBC looks ahead to congress considering a
corporate tax cut and expects an impressive market correction if congress and the president
do not deliver. The market is already pricing in a corporate
tax cut, which means there could be trouble if those cuts don’t get done, expert Robert
Luna told CNBC on Thursday. President Donald Trump has promised to slash
the corporate rate from 35 percent to 15 percent, while the House Republican plan calls for
a 20 percent corporate rate. “If that’s something that doesn’t get passed,
I think watch out below. A 10 to 15 percent correction is definitely something we’re preparing
our clients for,” the chief investment officer for Surevest Wealth
Management said in an interview with “Closing Bell.” What goes up can certainly come down. Bank
stocks have had a nice run up and may suffer as investors anticipate a Trump economic slump.
Health care stocks may be able to breathe easier as any further adjustment of the Affordable
Care Act will require the sort of due diligence that comes from both parties negotiating seriously
for an optimal solution. Gold mining stocks anyone? For more insights and useful information about
investments and investing, visit

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