Trump Era Has Began

Trump Era Has Began


New US President and markets await the new policies of his administration.

The world’s leading index traded moderately negative trend this week. US indices fell on average by 0.3%. European indices fell 0.8% and emerging bloc indexes fell this week by 0.3%.

US earnings season will be the focus in the coming weeks when companies in the S&P500 are expected to show growth of 3.7% in sales and 4.3% in net income versus the same quarter last year.

So far, 63 companies in the report, with 47% beat earnings estimates and 74% of net sales projections.

Government bond indices are also traded at a moderately negative trend. The yield on 10-year bonds, the US government increased from 2.4% to 2.47%. A similar trend was seen in the UK and Germany. There was also a moderate decline in corporate bonds.

Real positive trends in the global economy persist. Subject to positive growth above expectations in China (6.8%). An increase in the index of global procurement in December 2016, I led the United States and Europe and positive data from Germany.Simultaneously published negative data in the UK, a sharp decline in retail sales which indicates probably a drop in living standards there due to the rapid depreciation of the British Pound, discussions.

Simultaneously published negative data in the UK, a sharp decline in retail sales which indicates probably a drop in living standards there due to the rapid depreciation of the British Pound, Brexit discussions will start soon. We note the figures for real estate and prices were good in the US as well as companies reports (mainly earnings).

The European Governor announced the continuation of the European policy of quantitative easing in two phases by the end of 2017.

The American Federal watching the series Rate hike until 2019.

The price of oil rose by 1.6%, the index of commodity prices fell 0.3% this week and an ounce of gold rose 1.1% this week. The dollar was down 0.4% against a basket of currencies.

Trump’s inaugural speech was consistent with the statements made during the election campaign and in particular, accelerating the disengagement process from the global economic model worldwide through trade wars and wars on American investments and keeping them there, next to the disengagement from the global effort to reduce air pollution and to prevent global warming.

At the same time, and as a complement, Trump supports substantial budgetary expansion and tax cuts, in order to encourage local production and investments in infrastructure.

Trump’s inaugural speech indicates again the war in ISIS alongside coordination with Russia, Iran, and Syria. The US will likely continue cooperation with NATO while reducing defense spending there.

Trump is expected to tighten ties with the United Kingdom at the expense of the European Union, relations with China are expected to be tense and bad.

In a speech at Stanford University, the Fed Janet Yellen expects more rate hikes this year, bond yields to 10 years increased to 2.47% compared to 2.40% last week after data on inflation expectations are.

Keep in mind the actual interest rate increases the past two years were well below forecasts Fed periods preceded them.

Trump government as expected, published action plans as it promised in the election campaign, especially on foreign policy, trade, energy, and employment.China, which is central to his plans of Trump in the field of trade, released growth figures that match the government target – 6.8% in 2016 to imagine that at the upcoming China will gather quite a bit of attention in light of Trump’s plans.

China, which is in the central of his Trump plans in the field of trade, released growth figures that match the government target 6.8% in 2016. you can imagine that for the upcoming period, China will gather quite a bit of attention in light of Trump’s plans.

The Global Stock Market is facing a number of major challenges in 2017, including the uncertainty surrounding the policies of President Trump, and its implementation. Strengthening of the right-wing parties the Euro-skepticism in Western Europe for the elections in the Netherlands, France, and Germany, the ability of Japan and Europe show stable inflation and growth, at the background to the central bank operations, and the impact of monetary tightening is expected in the US on the currency basket.

Conclusions

Consumer Discretionary (IYC, XLY)- In view of the increase in income disposable light of the planned reform of the individual income tax.

Energy (XLE) – In view of the removal of environmental regulation, and support activities
Locally.

Finance (VFH, XLF, KBE) – In view of improvement in corporate profits in light of the improvement in economic data in parallel projected rate hike.

Technology (QQQ, IGV, FDN) – In light of conflicting effects on the bottom line of corporate tax reduction, on the one hand, and increasing regulatory supervision of the sector, on the other.

MSCI Europe / S & P Europe 350 (hedged) – In view of the positive effect of the expansionary monetary policy of the ECB on the profits of multinational companies (HEDJ).

Germany (hedged) – In view of the increase in revenues of export-oriented light of the weakness of the euro against the dollar (DXGE).

UK (hedged) – In view of the interest rate cut and positive growth and postponement of exit from the block will benefit private spending of leisure (DXPS).

Nikkei2225 (hedged) – In view of the monetary and fiscal expansion parallel to support the weak currency profits of exporters (DXJ).


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