2017 Second Quarter Outlook

 

The success of the first 100 days for the Trump administration is open for discussion.  The Pro-Trump camp sees the positives while the anti-Trump camp continues to fight the administration at every turn.

 

Donald Trump has gotten a Supreme Court judge appointed, foreign policy issues have been dealt with with military force and many executive orders have been signed to try and spur economic growth.

 

These positives are mostly off set by negatives namely a failed healthcare bill, several immigration issues which have been dealt with poorly and continued talk of protectionism and a border tax.  Donald Trump needs to get at least two and preferably three of his key campaign promises approved by Congress over the next couple of years.

 

In my view by year end we need to see the US pass at least a health care bill or tax reduction bill and the other being on the agenda to be passed. The reason for this the stock markets have factored in the benefits lower taxes and health expenses will have on corporate and individual earnings. The more success Donald Trump has in getting his pro-business mandate though Congress the more likely it is we will continue to see higher stock markets.

 

In summary, for bonds I see interest rates globally being quite stable with a slight bias to higher interest rates.  For equities I see better global economic growth and therefore better corporate earnings.  Based on this, stock markets should continue to rally over the next 6 to 12 months.  The risk of a negative political event from the US or Europe hangs in the background and has to be continuously monitored for its investment impact.

 

Please contact me if you have any questions or comments.

 

Best Regards

 

 

Bill Achtymichuk, CIM, FSCI, CFP®

Portfolio Manager

Investment Advisor, Director, Private Client Group