Weighing the Prospects of Trump’s Policies against Political and Economic Realities
“Don’t forget about the huge difference between expecting something and experiencing it.” Attributed to Angela Merkel
In our Outlook (October 13th) published before the Presidential election, we described a world at an inflection point. Monetary policy, which had succeeded in stabilizing economies and markets after the financial crisis, appeared to be reaching its limits. We wrote that “without proper fiscal policy, investors should expect more of the same low growth, low interest rates and low inflation … we have experienced for some time.” The election result in the U.S. is being interpreted as a call for change, and some of the initiatives being proposed echo the policies that we have called for in this Outlook for years. These include investing in U.S. infrastructure, making corporate tax policy globally competitive, repatriating cash held overseas by U.S . corporations and reducing the regulatory burden on businesses. Importantly for investors, there is a renewed sense of confidence and optimism developing from U.S. businesses and consumers as the long-awaited fisca l policy initiatives appear to be on the way to complement the accommodative monetary policy stance of the Federal Reserve. The outlook for corporate earnings (higher), inflation rates (slightly higher) and interest rates (trending higher, but continuing to be well below historical norms) remains supportive of equity investments.
Continue reading attached PDF for full Outlook.
Adam Klein
ARS Investment Partners, LLC
aklein@arsinvestmentpartners.com
646-736-0453