Nimble Investors Win in the Trump Economy

Stock market news has continued to weigh heavily toward politics compared to the usual economic indicators, stock news and even earnings.

For someone seeking to read up on the latest stock market news, this can be annoying.

I understood it during the election and the months following. But now it’s almost nine months after, and eventually reporters will have to report on the actual data instead of political uncertainties.

Here we are at the start of a strong earnings season (so far), and as I browse through many of the financial news websites, they’re still filled with political jargon.

However, these political headlines are stock market news… because they are affecting our economy and your stocks as I write this.

They may not have much of an impact in the long run, but in the short term, they are creating volatility that requires either a strong stomach, or the nimbleness to be able to adapt rapidly.

I take the latter approach.

Political Impact

I have seen a great deal of political impact in seasonality trading, where President Donald Trump’s hopes to restore infrastructure spending and fuel U.S. growth have propelled the materials sector higher through a seasonally weak period.

This is the kind of thing that we have to pay attention to as Trump continues to find his rhythm in office.

But political issues aren’t just disrupting recent seasonal trends. They’re slowing our economy as well – at least according to the International Monetary Fund (IMF).

Last week, the IMF slashed the projected U.S. growth rate from 2.3% in 2017 and 2.5% in 2018 down to a tepid 2.1% for both years.

That’s not only a cut to our growth, but it’s a shot to Trump’s ego. He campaigned on returning America to 4% growth. Since then, his promises are returning America to 3% sustainable growth, and the IMF temporarily had increased its outlook for the U.S.

But in Trump’s first two years, the IMF now sees mediocre growth at best, with expectations at just 2.1%.

The Status Quo of the New Regime

This reality of where our growth is versus where our growth is expected to be is evident on a quarter-by-quarter basis when you look at the Atlanta Federal Reserve’s GDPNow forecast.

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