A Quiet Day

By: Kent Engelke | Capitol Securities

Markets were quiet yesterday. Conversations centered upon whether or not the President could execute his aggressive tax and regulatory reforms. I don’t think it is far fetched to write almost the entire political establishment is against him. But what is new? Nothing has changed as the establishment was against Trump since the primaries.

What I will write if the economy grows at a 3% pace or greater, many of Trump’s misgivings will be overlooked. It is dangerous to suggest a quarters’ growth rate midway during the period. However, with this written, the Atlanta Fed issued its mid-quarter projection, projecting growth between 3.25% and 3.5%.

Wow! A lot can happen between now and June 30. However, it is evident by the sentiment surveys as well as recent data points; the proverbial animal spirits have been awakened and are doing more than stirring.

Even if Trump’s aggressive agenda is not legislated, many are feeling the relief from the lack of even more regulations. During the last eight years the economy, American businesses, were drinking from the proverbial regulatory fire hose. The flood has ended, a reprieve that feels as good as when one stops banging their head against the wall.

What will happen today?

Last night the foreign markets were down. London was down 0.37%, Paris was down 0.28% and Frankfurt was down 0.28%. China was down 0.27%, Japan was down 0.53% and Hang Sang was down 0.17%.

The Dow should open moderately lower on political concerns. The 10-year is up 9/32 to yield 2.30%.

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