A stronger dollar hammers profits at U.S. This in turn will result in negative earnings revision for the S&P 500 and will be a deterrent to economic growth.
BEST PERFORMING MUTUAL FUNDS FEB 2016 FREE
If such a tax gets implemented, economists at Deutsche Bank AG ( DB Quick Quote DB - Free Report) estimate that inflation will cross the Fed’s desired target level of 2% and push the dollar up by about 15%. Navarro along with Trump’s pick for commerce secretary, Wilbur Ross, favor border adjustment tax that is also included in House Speaker Paul Ryan’s “Better Way” tax-reform blueprint. Meanwhile, by naming China hawk Peter Navarro as the head of a newly formed White House National Trade Council, the Trump administration has clearly indicated that the plan of imposing tax on imports is on track. His promises have more or less helped the stock market gain traction over the last two months. Trump had earlier promised to deregulate certain sectors, lower corporate taxes and inject fiscal stimulus measures, which were expected to drive economic growth. Trump’s press conference this month disappointed investors due to the lack of policy details. Dividend is mostly paid by companies that boast solid financial structure and healthy underlying fundamentals, and are unperturbed by market turbulence. To overcome the adversities, income seeking investors should look for funds that are exposed to stocks providing juicy dividends. Moreover, risky assets including stocks suffered from a serious case of “Brexit Blues,” forcing investors to park their money in safe-haven assets such as bonds. Needless to say, Trump’s market-friendly policies are turning the broader market into one giant bubble, raising likelihoods of disenchantment for investors in the near term. However, of late, there have been indications of stricter trade policies from President Donald Trump’s camp, which might eventually dampen sentiments. The stocks, nevertheless, wrapped up the year on an impressive note buoyed by expectations of business-friendly developments in Washington propelling growth as well as inflation. After gaining some stability, the markets were quite a snoozer until the election. The stock market was off to a dismal start last year, with unpredictable share price movements bothering investors especially in January and February.