Investors cautious as tensions rise again, while oil recovers after Hurricane Harvey
Of course Trump has other things on his plate too. There is his tax reform speech on Wednesday, but there is also the problem of the debt ceiling and Trump’s threat last week to shut down the government if he does get funds for his Mexican border wall.
The arrival of Hurricane Harvey and the cost of repairing the damage will only put more pressure on the country’s finances, and will not help Trump’s attempts to finance his pet project. CMC’s David Madden:
Traders are looking ahead to Donald Trump’s speech on Wednesday, where he is going to talk about bringing in tax reform, and investors are certainly in favour of the President’s pro-business policies, but will the plans get introduced. Mr Trump failed to overhaul the healthcare system, and it wasn’t just the Democrats who scuppered his plans, members of his own party opposed it too.
What benefits the President, is that tax reform is the sort of policy that you could imagine support coming from both parties.
President Trump’s response so far to the latest North Korean missile has been fairly measured but investors will be watching what he says or does next. Konstantinos Anthis at ADS Securities said:
Stock traders are concerned that if the situation escalates even further then the markets will look for risk-off assets taking bets off the equities. The US futures are also pointing towards a bearish opening and the important question now is what President Trump’s response is going to be: if the US President opts for a tempered response then stock traders will breathe a sigh of relief but on the opposite case a sharp sell-off can drive the equity indices down to their recent lows.