Risk Bounces After Trump Promises To Start “Spending On Infrastructure Big”, But Warns On Tax Plan
With the dollar sliding on rising fears Trump may disappoint in his address to Congress tomorrow evening, moments ago the dollar spiked, and risk assets rebounded after headlines hit from Reuters and Bloomberg in which Trump previewed what he would say, saying he would have a “big statement” on infrastructure in his Tuesday speech, adding that “we’re going to start spending on infrastructure big.”
- TRUMP SAYS HE WILL HAVE BIG STATEMENT ON INFRASTRUCTURE IN HIS TUESDAY SPEECH.
- TRUMP SAYS “WE’RE GOING TO START SPENDING ON INFRASTRUCTURE BIG”
- TRUMP SAYS THERE IS `NO CHOICE’ BUT TO SPEND ON INFRASTRUCTURE
- TRUMP SAYS HE HAS `REALLY, REALLY GOOD’ SOLUTION TO OBAMACARE
Among the key soundbites from Trump’s meeting with governors at White House.
- “I wonder how many people are hurt” when driving “through a tunnel and a tile falls off,”
- “We’re going to start spending on infrastructure big”
- He wants “free” and “fair” trade; U.S. should be “taxed at the same amount the other countries”
However, fading the optimistic tone, Trump also warned that his tax plan would be released only after Obamacare is tackled, and health plan costs are known:
- TRUMP SAYS HIS TAX PLAN WILL BE RELEASED AFTER ADMINISTRATION PROPOSAL ON OBAMACARE
- TRUMP SAYS CAN’T DO TAX PLAN UNTIL KNOW HEALTH PLAN COSTS
In other words, Trump’s “phenomenal” tax plan, the catalyst for much of the market’s recent move, may not be unveiled for a long time as a result of the previously noted hurdles facing Obamacare’s repeal and replace. That said, he expressed optimism on the topic of repealing and replacing Obamacare, saying “we have come up with a solution that I think is really, really good.” It remains to be seen what it is.
For now algos heard “big” when it comes to Trump’s plans and loved it, and the result was a spike in both the USD…
… and the S&P.
Of note, the biggest rebound is in the infrastructure and construction sectors, rising on renewed hopes of an infrastructure stimulus.