The Nasdaq Composite yesterday reached a fourth record close but Dow Jones again failed to break the 20,000 level and lost 0,2%. Market participants are waiting for the earnings season to start and are also waiting for Trump to provide some guidance on future policy at a news conference scheduled for 19:00 GMT+1 today.
The unexpected Trump victory in the presidential election has resulted in a massive amount of uncertainty regarding the US. This relates to both fiscal policy and trade policy as well as to foreign relations. Markets have so far chosen to interpret the Trump victory as a positive for the US dollar and equities based on expectations of tax cuts and large infrastructure investments.
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However, there are several risks related to a protectionist US trade policy resulting in retaliation by trade partners and negative effects on the US economy due to dollar strengthening. Currently, the post-election rally has grinded to halt with markets waiting for more clarity about the Trump administration’s policy. Various Trump statements have already affected individual equities significantly and depending on the outcome of the news conference today there could be effects on both stock markets and dollar.
