Trump's First 100 Days Yield More Investor Caution Than Confidence
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Version 0 of 1. President Trump's first 100 days in office haven't made investors overly optimistic or pessimistic, but they haven't made them confident, either. According to a report by Bankrate.com, 38% of Americans believe that a turbulent political environment poses the greatest threat to the United States economy over the next six months. Political and economic instability overseas (19%), terrorism (14%), rising interest rates (10%) and a decline in the stock market (9%) are all far lesser concerns. Back in September, amid the uncertainty of the presidential campaign, 61% said the outcome of the election was the biggest economic risk over the next six months. The election's result didn't do much to assuage fears, as the political environment in Washington remained the top economic risk cited by every age, income, gender, racial/ethnic group and political affiliation. "Our survey indicates that many Americans feel they have a lot riding on what elected leaders do - or don't do - in Washington," says Mark Hamrick, Bankrate.com's senior economic analyst. "After all, it's taxpayers who end up footing the bill and consumers who could stand to lose or benefit." Democrats, higher income households and college graduates are the most likely to cite the political climate as the biggest economic risk, whereas those concerns were fairly evenly distributed back in September. Younger millennials (18-26 year-olds) are more likely than older adults to point to political or economic instability overseas. Meanwhile, interest rate worries doubled since September, with the Federal Reserve hiking interest rates twice in during that span. Even President Trump's allusions to tax reform haven't helped. "In the eyes of financial markets, apparently all the concerns about North Korea, Syria, et al. have been vanquished as the euphoria about tax reform has taken over," says Greg McBride, Bankrate.com's chief financial analyst. "Wake me when something actually gets signed into law." But that's the issue: investors are still waiting for legislative direction. High-income investors, especially, have been waiting for the Trump administration to make any sort of effort. Roughly 61% are optimistic about the next year with a little more (66%) optimistic about short-term share performance. While 74% told UBS they'd like to see Trump focus on tax reform next and more than half of investors (56%) want to put extra capital into investment, there's still some hesitation. "It is encouraging that we continue to see optimism among investors and small business owners rising over time, as well as a willingness to put their capital to work," said Paula Polito, Client Strategy Officer of UBS Wealth Management Americas. "Once investors start to see more progress on initiatives that boost the economy, it seems likely they will be further committed." |