Trump’s first 100 days: A look back and ahead on the markets

 In Blog

Trump’s first 100 days in office has been full of surprises, leaving investors curious as to where to invest their money. We have seen a rally in the stock market causing certain sectors to be more promising than others, depending on how they are impacted by Trump’s policies. Since Trump’s inauguration, the Dow is up 6.33 percent and the S&P 500 is up 5.52 percent, which is positive for the U.S. economy. Given a look back on the markets under Trump thus far, and expectations ahead, below are some sectors that could outperform throughout 2017 and others that might not be poised to do well.

Sectors poised for growth:

Defense: Republicans have long been advocates for increasing the military budget, which in turn can boost defense-related stocks. The administration’s plans to bolster the U.S.-Mexican border patrol and to reintroduce ground troops into the Middle East bodes well for companies in the defense and aerospace sectors.

Infrastructure: During his campaign, Trump proposed to spend $1 trillion on a variety of infrastructure projects over the course of 10 years. His plan for the $1 trillion infrastructure initiative will be announced later this year. The government’s focus on rebuilding America’s infrastructure is encouraging for companies in this space.

Sectors that may pull back:

Pharmaceuticals: Trump has been a proponent of lowering the prices on pharmaceutical drugs. If successful, this would be positive for individuals, making healthcare more affordable. However, it would lower pharmaceutical company’s profit, impacting their bottom line and overall value, thus putting pressure on this sector.

Fixed Income: Relatively low unemployment numbers has given the Federal Reserve the green light on a number of interest rate increases. A rising interest rate environment, coupled with the administration’s pro-growth agenda, could put strain on this asset class.

If there continues to be gridlock in Congress and initiatives are unable to be enacted—we may see little economic impact. While investors may see ups and downs in the market throughout the rest of Trump’s presidency, it’s always important to keep investment goals in mind. It may be tempting to move your portfolio away from potential volatility, but remain prudent with investment decisions and stick to the plan set forth by your advisor.

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