By Gary Wagner
This term was coined long before the inauguration last Friday to describe a new and different way of ramping up the United States economy. Today we got our first insights into how President Trump and his administration will function on a day-to-day basis, and most importantly, where his initial focus will be as he begins the complex task of initiating multiple strategies to add fuel to the American economy.
There is no doubt that there was a basic message on day one of this new administration. It is not business as usual in Washington. This is not the status quo.
President Trump got off to a running start Monday morning. On his first working day, he held a breakfast meeting focusing on creating economic opportunities for American workers; something that was at the core of his campaign pledges. Present at this meeting were the CEOs from Dow Chemical Company, Ford Motor Company, General Motors, Dell Computers, Johnson & Johnson, Lockheed Martin, Whirlpool, United States Steel Corp, Under Armour, International Paper Company, and Tesla Motors.
According to Bloomberg News, President Trump said, “We are going to be cutting taxes massively for both the middle-class and for companies, and that’s massively.” Bloomberg also reported that, “a roll-back of business regulations would be a particular focus of his economic plan, saying his observation has been that “regulation wins” over tax cuts as the most important factor in promoting growth.”
Market Sentiment Continues to Promote Uncertainty
Even though President Trump got off to a running start today, there remains an amount of market uncertainty and caution as reflected by price changes in US equities and gold today. However, initial weakness present in the US equities markets, and losses in the morning, took the Dow to an intra-day low of 19.732. However, traders bought into that weakness, moving the Dow to 19,800 by the close of trading today.
Gold prices flourish today as a direct result of US dollar weakness. The Dollar Index lost a little over a half of percent in value allowing gold to continue its dramatic rise. Gold spot prices rose roughly 5 dollars on the day to close at 1215. According to the Kitco Gold Index (KGX), this five-dollar rise was due to a net gain of $7.25, based upon a weak US dollar, with normal trading of gold amounting to a loss of $2.35 on the day.
As we have spoken about on multiple occasions, whether or not President Trump is able to convert his campaign promises and pledges into policies will be the critical component in his success. Although we are only at day one, it is quite evident that this new administration is wasting no time in initiating the necessary steps to get the process started.