Corporations and investors around the world will be tuned into U.S. President Donald Trump’s prime-time address to both houses of Congress tonight, watching to see if the president plans to act on campaign pledges to lower corporate taxes, cut regulations and spend big-league on infrastructure and defence.
U.S. financial markets have been on a tear since Trump was elected last November, hitting record highs at least in part in anticipation of a pro-business agenda backed by the Republican Congress.
But Trump’s unpredictable behaviour has also spooked Wall Street at times, leading to uncertainty about how the 45th president might steer the U.S. economy. Tonight’s speech will provide more data for investors to chew on as they place their bets for the future.
If stocks are going to continue making Trump-inspired gains, said one analyst, the president will have to avoid populist themes during his address and focus on business-friendly policies.
“The markets will be disappointed if we get round two of the inauguration speech from mid-January where the themes were about protectionism,” said David Rosenberg, chief economist with wealth management firm Gluskin Sheff.
“I think a little less on economic nationalism, a little more on tax reform and deregulation, is going to be needed to justify the move that the market has made over the course of the past several months,” he said.
Investors bet on infrastructure spending
After a meeting with state governors on Monday morning, the president said he was going to “have a big statement tomorrow night on infrastructure.”
That echoes comments made last week by Trump’s press secretary, who said the president and a group of U.S. business leaders discussed using public-private partnerships as “the cornerstone of a robust plan to rebuild the nation’s crumbling infrastructure.”