U.S. Indexes Fundamental Forecast, March 01, 2017
On Tuesday U.S. stocks closed lower becouse of investors doubts That President Trump will provide details about his economic polices and his speech Tuesday night will be more focused on immigration policy. These doubts were confirmed during speech and investors di not get details on reform taxes or how Trump intends grow the economy through agressive fiscal spending.
I think nearest time we cann a bit “tired” market, as investors want to see some actions from President or at least get details of his future plans. As a rule investors give 100 days for new president to roll his agenda. With that being said, I do not wait for trend reversal now, but I would not be surprised by near- tearm correction.
Any complications now may grow concarns that Trump may not be able to accomplish any of his economic policy plans. Once again, It does not mean trend reversal. Economy needs time for growth along with earnings.
If Fed raise rates sooner than expected, It will cool down the economy. Every day Fed seems to be more and more ready to raise rates. Strong growth and a heated-up economy will draw the attention of the Fed who seem to be ready to raise rates before the economy get too hot. A sooner-than-expected rate hike by the Fed will likely cool down the economy. Investors are ready accept two rate hikes, but three can be to difficult to handle. March rate hike increases possibility to see 3 hies this year.
If stocks do weaken on Wednesday, It will be a sign of frustration with Trump over the lack of details for his economic plans. If it comes in lower than expected then stocks may turnaround and post new record highs by the end of the session.