After entering office as the 45th president of the United States in January, Trump’s first 100 days were seen as a key indication of how the rest of his term will proceed. How did he fare at enacting policies, and how did the markets react?
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Trump's first 100 days
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Why were Trump’s first 100 days important?
In electing Donald Trump as their next president last November, the people of the United States made a huge step into the unknown – choosing a president with no political experience, and a radical agenda.
All of which made the first 100 days of his presidency even more significant, as the markets attempted to ascertain whether he was able to deliver on the lofty promises he made during his campaign.
How were key markets affected?
In his first ten days on the job, Trump signed seven presidential memorandums and seven executive orders. Those 14 actions brought few concrete proposals for traders to base decisions on – but still led to huge market moves.
And that set the tone for much of his first 100 days, with markets remaining largely enthused despite his attempts to enact a travel ban, dismantle Obamacare and increase spending all stumbling. The Dow Jones and S&P 500 were both particularly affected, hitting record highs at the beginning of March.
US markets did then experience a bout of scepticism, as fears over Trump’s ability to enact his ambitious plans took hold – before the announcement of a of an intended 15% corporation tax ensured that equities ended this period strongly.
Renewed optimism over sterling and the euro thanks to political developments in Europe, meanwhile, ensured that the dollar had a more mixed run over the course of Trump’s first 100 days.
Which markets will be most affected?
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Prices above are subject to our website terms and conditions. Prices are indicative only.
Trump’s first 100 days, as it happened
Here’s what our expert analysts had to say about the first few months of Trump’s term:
- The first week in charts – 30 Jan 2017
- Has Donald’s dollar drive got legs? – 16 Feb 2017
- Trump and the banks – 20 Feb 2017
- What would a Donald Trump US economy look like? – 29 Feb 2017
- The markets remain enthralled – 7 Mar 2017
Trumponomics
How much progress is Trump likely to make in the four key tenets of ‘Trumponomics’ – and how could they impact traders?
What is Trumponomics?
Much of the growth seen in US indices and the dollar after Trump’s victory was based on the potential impact of ‘Trumponomics’, or Trump’s economic policies for the US. Those policies mark a sea change from those of Barack Obama, with a focus on boosting US business with tax cuts, deregulation and infrastructure spending while restricting trade.
Tax cuts
Trump’s attempts to enact his tax policy – halving what corporations have to pay and reducing the number of tax brackets for US households from seven to four – has been major stumbling block in his first 100 days.
That will come as a bitter blow to many investors, both because Trump’s tax policy was seen as a bonus for US businesses and because it damages Trump’s reputation as a president who can ‘get things done’.
Government spending
Trump’s proposed spending increase was never likely to sit well with Congress, especially with entitlement spending also set to rise. So it isn’t surprising that he’s struggled to make early headway here.
But his failure to replace Obamacare with the American Care Act presents a bigger failure. Few envisaged that Trump would end his first 100 days with the Affordable Care Act still in place.
Deregulation
Trump’s stance on regulation is popular with many Republicans, and he made headway by ordering a review of the Dodd-Frank act – though that has not yet come to fruition.
His budget proposal, released in March, saw the Environmental Protection Agency’s funding cut by 31%. It was a concrete sign that Trump plans on rolling back environmental regulation, but remains to be seen how much of the budget proposal comes into effect
Trade tariffs
TPP was an early victim of Trump’s presidency, but his planned use of high trade tariffs has been harder to implement. The proposed 45% tariff on Chinese goods, for example, now looks unlikely to arise.
That is good for US businesses, in the short term at least. But it also means that the inflation that many expected from Trump’s presidency may not arrive as soon as hoped.
Key appointments
A good early indicator of Trump’s commitment to Trumponomics came from his appointments to governmental positions, including key personnel who appear set to pursue his agenda on tax, trade and deregulation.
Key personnel |
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| Secretary of State: Rex Tillerson | The CEO of ExxonMobil before stepping down to take over as secretary of state, awarded the ‘Order of Friendship’ by Putin in 2013. |
| Treasury Secretary: Steven Mnuchin | A Goldman Sachs veteran who worked at the bank for 17 years. |
| Secretary of Commerce: Wilbur Ross | A billionaire investor who has been outspoken about renegotiating US trade pacts. |
| Head of the EPA: Scott Pruitt | Former attorney general who has previously sued the EPA. |
| Secretary of Energy: Rick Perry | A previous candidate for the Republican presidential nomination, who vowed to abolish the Department of Energy during his campaign. |
| Director of the National Economic Council: Gary Cohn | The president of Goldman Sachs, and Trump’s third key appointment from the US bank (after Steven Mnuchin and Stephen Bannon). |
Trump vs the world
Just as important as Trump’s policies is his ability as a statesmen and how well he gets along with key figures both globally and domestically. His attitude towards China, Europe and Russia is particularly pivotal.
China
Before his inauguration, a war of words between Trump and China threatened to expand into a trade dispute with grave implications. Since entering office, Trump has struck a more conciliatory tone – and a visit from Xi Jinping in April proved positive. However, Trump’s relationship with Russia has shown that tensions can always quickly arise.
Watch out for:
- Competition for influence in the Pacific and South China sea
- Any signs that Trump’s attitude to China is changing
- Trump making statements about Taiwan
Find out more about China in 2017
Europe
Trump’s election was greeted with enthusiasm by Eurosceptics, but few others. He was vocal about his support for Brexit throughout his campaign and allied himself with Nigel Farage in the months after. Since entering the White House, his meetings with key leaders like Angela Merkel have once again seen him adopt a different tack.
Watch out for:
- French presidential election (rd.1) - 23 April
- French presidential election (rd.2) - 7 May
- German federal election - Autumn
Find out more about the EU in 2017
Russia
Trump’s relationship with Vladimir Putin, meanwhile, has deteriorated. Their growing closeness appeared to backfire in the run up to Trump’s inauguration, and questions over his relationship with Russia haven’t gone away. In April, the relationship soured after Trump sanctioned airstrikes on Syria in a radical change of policy.
Watch out for:
- Any signs of Russian aggression in the Ukraine, or other Baltic states
- What happens next in Syria
Trump vs the Fed
Another key figure who felt Trump’s ire throughout his campaign was Janet Yellen. Trump had previously claimed he could replace the Fed chair with a Republican, which suggested an intention to politicise the Fed, bringing it much more into line with Republican (or his own) policies. But in his first 100 days, he once again proved more conciliatory in tone.
That the US economy remained robust throughout his first three months probably helped matters. And with few actual changes in economic policy from government, the Fed may have found Trump’s first 100 days easier than many predicted.
Going forward, watch out for:
- US durable goods reports
- US consumer confidence reports
- US non-farms reports
- FOMC rate announcement reports
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2016 financial events
The US presidential election was one of the biggest market-moving events of 2016. Learn more about other key financial events in 2016.
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