Trumponomics

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As the shock of Trump’s upset victory is slowly starting to wear off, attention is turning to exactly what kind of economic policies the new Presidential administration is going to pursue. It is a very big question, as the new administration seems likely to mount the biggest challenge to prevailing economic orthodoxy since 1980 or possibly even earlier.

News outlets are starting to zoom in on a “first 200 days plan” document which is being discussed by the Trump transition team, and which has been obtained by CNN.

The key proposals for discussion are:

  1. Renegotiating or withdrawing from NAFTA
  2. Stopping the Trans-Pacific Partnership Deal
  3. Stopping “unfair imports”
  4. Ending “unfair trade practices”
  5. Pursuing new bilateral trade deals
  6. Retain and return manufacturing jobs

The document suggests that Trump is serious about trying to effect real economic change, although how this might take shape and how watered-down eventual measures might be are very much up in the air.If such an agenda is forcefully implemented, it will mean some big changes for the U.S. economy, with some corporations big losers and other big gainers. U.S. government policies have increasingly become hugely influential upon the prospects of different industries and sectors.

As for the markets, stocks remain strong although the rally has slowed down, and it’s the same for the U.S. Dollar although the greenback is being boosted by stronger than expected retail sales data. The big story today is the bond market, which is being massacred with a big spike in yields explained as a reaction to an expectation that Trump will take strong measures to generate an economic stimulus. If your broker offers trading in government bonds, especially U.S. Treasury bills, it might be something worth looking at now.

Stock Market

Adam is a Forex trader who has worked within financial markets for over 12 years, including 6 years with Merrill Lynch. He is certified in Fund Management and Investment Management by the U.K. Chartered Institute for Securities & Investment.