Investors across the globe remain in celebratory mode following Donald Trump's historic election victory. The benchmark S&P 500 index is up almost 4% since Election Day. As the U.S. stock market continues to hit new all-time highs, there are a number of important developments looming as the new administration takes shape. Here's a look at key Washington to Wall Street issues which may have significant investing implications.
MARKET MAKER-IN-CHIEF?
#Boeing #AirForceOne
In the changing landscape of a Trump Presidency, the tweeter-in-chief showed his ability to affect markets with just one post. Via his Twitter account Trump called for the cancellation of Boeing’s Air Force One upgrade and the stock dropped over one percent in the opening of trading.
The timing of the tweet was interesting as prior in the day the CEO of Boeing made pro-free trade comments in the Chicago Tribune. As the campaign and transition have indicated, Trump has no plans to stop using his twitter account to speak his mind - so expect the markets to hang on his every word.
TRUMPETING TARIFFS
#OutSourcing #Punishment
Congressional Republicans and President-elect Donald Trump are divided over the issue of companies moving jobs overseas. While glossed over publicly, this signals the first split between the conservative orthodoxy of Speaker Paul Ryan and Majority Leader Kevin McCarthy and Trump whose populist economic policy falls farther to the left.
Trump is seeking to impose a 35 percent import tariff on goods sold by U.S. companies that move jobs overseas. Ryan, McCarthy and other party leaders are pushing back saying that although they have the same goal, reforming the corporate tax code and rates will do a better job at keeping U.S. jobs in the U.S.
OIL SHOT ACROSS THE BOW
#Iran #NukeDeal
Throughout his campaign, Trump said that he was going to tear up the Iran Nuclear Deal upon taking office. Now that he has won, he is coming face-to-face with an angry and dangerous nation. Iranian President Hassan Rouhani is now pushing back on Trump's declarations. He's saying he won’t allow the president-elect to tear up the deal.
The agreement, which relieves years of economic sanctions against Iran allowing them greater access to the international oil market, forces Iran to allow international inspectors to monitor their nuclear program. Trump, may now be facing he most consequential negotiation of his career with the U.S's longstanding nemesis.
RESHAPING THE PARTY OF LINCOLN?
#GOPFuture #Candidates
Die-hard Trump supporters are using his historic presidential election victory to climb up the proverbial political ladder. Loyalists across the U.S. are beginning to make plans to run for higher office. Others are looking to knock off state party leaders looking to mold the party into Trump’s image. Jane Timken, an Ohio fundraiser for the president-elect, plans to challenge respected state party chair Matt Borges.
Meanwhile, New Jersey Governor Chris Christie and Pennsylvania Trump Chair Dave Urban are likely to battle for Reince Preibus’ old job heading the RNC. Republican Party positions aren’t the only place where Trump supporters are looking to make their mark, Trump’s Virginia state chairman, Corey Stewart, is preparing to run for Governor in 2017.
senate SPOILER ALERT
#ObamaCare #Repeal
Senate Majority Leader Mitch McConnell has announced his 2017 agenda. He confirmed that the ACA repeal will be the top task the Senate works on when they convene for the first time January 3rd. The repeal legislation is expected to move quickly as House and Senate Republicans have already been through a trial run with repeal legislation passing both houses just over one year ago -- ending with an Obama veto. Replacing the outgoing president’s signature deal will be not be quite as easy.
Illustration by Hedgeye cartoonist Bob Rich.
