What investors want to hear from President Trump

Later today we expect Donald Trump to stand before Congress and give details of their policies. Investors expect to hear answers to tax reform, foreign policy, protectionism and strategy for a strong dollar.
Investors expect to hear clarity on that promised policies will be implemented.

Stock market
The most important question for market shares is tax reform because it promises the companies to increase their profits, especially for smaller companies who are willing to pay a higher tax rate by multinational companies.
The market is looking for information on what to expect and when, said Vinay Pande, head of short-term investment opportunities at UBS Wealth Management, who believes that a drop of 5% of the current tax rate will result in a 4% with EPS growth of companies. The backbone of the last rally was precisely this expectation of investors for changes in tax rates.
This gives the president an advantage and time to carry out their election plans and explains why stocks ignored the political noise about discord in the new administration. Investors also expect the new president to talk about border fees are thinking to introduce foreign goods.
Investors believe that this fee would be inappropriate, since many parts of the economy depend on the goods produced outside the United States. These fees can be quite problematic for the future growth of the economy. Most these fees will harm the automotive sector.

Bonds
At the moment the feeling of waiting Trump makes 10 year bonds remain relatively unchanged levels around 2.40%. For all investors bond market suggests many doubts about whether the United States will achieve significantly faster growth under the management of Trump that warrants lifting interest rates by the Fed.
Bond investors expect Congress to adopt policies related economy and not be distracted by other internal reforms such as migration.

Corporate bonds
Currently risky corporate bonds move around 2.5% yield ahead with its 0.9 percent lower risk counterparts. Now investors expect changes in the tax code, and in particular the possible elimination of interest deductions. This can significantly reduce sales of new bonds and strengthen the demand for current debt.

Currencies and Emerging Markets
Significantly strong dollar is marked to grow because of the choice of Trump for president because he promised tax reform and significant increase in investment in infrastructure, which will inevitably lead to higher inflation. Since the beginning of the year until now, the dollar weakened slightly as investors expect the statement to Trump at the congress, which will give clear direction where eventually the market will continue to evolve.
Four areas will be key to the direction of the dollar and colleagues from emerging markets - tax reform, foreign policy, protectionism and strategy for a strong dollar.
The currencies of emerging markets are on the rise citing that Trump will be softened and will withdraw its aggressive threats to some of the developing economies in the world.

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