WASHINGTON, February 28, 2017 – As we have indicated in our companion column Tuesday, we expect markets to meander without a particular direction as traders and investors await the contents of and reaction to President Trump’s Tuesday evening address to Congress.
Wall Streeters and home gamers alike will be looking for clear directions on White House policy, some indications of support for elements of that policy on the Hill, and the amount of pushback—likely hysterical—the President and the Republican-led Congress can expect from a Democrat Party that seems firmly in control of Soros-controlled, Marxist and globalist dead-enders.
Trump will certainly push a big boost in defense spending, including an end to “sequestration” (actual or implied). In addition, he will likely have more than a few words to say—hopefully some of them quite specific—on “repealing and replacing” Obamacare as a necessary prelude to those YUGE tax cuts he feels are needed to give the U.S. economy its first real boost in 8 years.
Both Trump—and wiser heads in Congress—know that both the President and his utterly disorganized party will need to score at least one impressive and definitive win no later than the end of Q2 2017 to induce Republican voters and Trump supporters (who are not necessarily Republican voters) to stay on board The Donald Express for those crucial 2018 midterm elections.
What all today’s and this evening’s politicking means for prudent individual investors is that for the second trading day in a row, it’s best to think about sitting on the sidelines yet again. As of 11 a.m. ET, major market averages are essentially flat and running slightly to the downside, a pattern we saw Monday before stocks turned up and the averages scored new highs. That may or may not happen today.
This is a market that really wants to correct at this point, at least by going sideways for a time. Defense stocks are already getting a boost from the rumor mill, but we’re cautious everywhere else. Consequently, we’re taking little profits from small trading positions in ETFs and doing little else. We’ve sold a small position in the Guggenheim Equal Weight S&P 500 ETF (symbol: RSP) and have also peeled off another small position in the Schwab dividend ETF (SCHD) as it hasn’t been too exciting lately.
Other than that, fingers crossed until President Trump delivers that very important address to a hostile and confused Congress.Click here for reuse options!
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