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100 days of solitude

| Posted by: Paul Donovan | Tags: Paul Donovan Weekly

  • US President Trump has tweeted that the one hundred-day milestone is a "ridiculous standard". However, one hundred days is a standard much used by the media. Previous US presidents enjoyed a "honeymoon" period of easier cooperation with Congress over this period.
  • Over the hundred days economic data has tended to be stronger than expected. "Hard" economic data momentum is a legacy of the last administration. Trump can claim some credit for better "soft" data. US equities initially surged then stalled near record highs. US bonds have moved little, and the dollar has weakened. This might reflect some international investor concern about Trump (international investors determine the value of the dollar).
  • "Do I have a job" and "can I afford to spend" are the questions that drive short-term economic activity, not politics. However, politicians do impact longer-term economic trends and Trump's first hundred days send some signals. The difficult relationship with Congress raises questions about the president's ability to influence the fiscal agenda. Wavering policy stances on trade and the Federal Reserve add uncertainty-risk for investors. Perhaps a hundred days of Trump signals that investors should put faith in the economic and corporate fundamentals of today, more than the political promises of tomorrow.