Major averages finished mixed, consolidating recent gains on lower volume. The NASDAQ-100 and SOX indices put in the strongest performances.
Futures are lower as investors contemplate the implications of President Trump's executive order, which temporarily suspends the U.S. refugee program. There is also talk/rumors of Trump's tax cuts being delayed for a year, which in our view would be much more material for the markets. Combine this with the potential for a trade war, and the rally could hit the skids very quickly.
An analyst at Deutsche Bank said a Trump victory does mean higher growth this year, but investors should get used to volatility. “It just seems that there are too many uncertainties, unknowns and major policy changes attached to a Trump presidency for it to be a smooth year,” he added.
Meanwhile, an analyst at CMC Markets commented, “The big question haunting markets today is whether the chaos over temporary changes to immigration policy could be a prelude potentially bigger disruptions from changes to trade relationships and tariffs. In the 2000-2002 bear market the last leg down started to the day when then President Bush slapped an import duty on Chinese steel in a bid to block dumping.”
Isolationist policies could be a headwind to global economic growth.
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