President Trump
President Trump took a lot of heat during 2017, mostly because of his conduct and personality. Additionally, several critics focused on his failure to pass important bills, the number of regulations slashed and executive orders signed and whether he kept his campaign promises. From a financial market standpoint, however, investors can’t deny he’s been a positive influence on the markets.
Whether you want to give him credit or not, the stock market as measured by the Dow Jones Industrial Average finished up more than 5000 points since he took office. Additionally, gross domestic product growth was 3.3% in the third quarter (a strong performance when compared to President Obama’s barely 2.0% annual performance).
Additionally, with his help, the Republican-led House of Representatives and Senate, passed the most sweeping tax overhaul bill in 30 years. This bill could lead to further economic growth in 2018 because it slashed the corporate tax rate by 14% and will give most Americans, over a few years, a bump in their paycheck.
Brexit
After a few stops and starts early in the year, negotiations on Britain’s exit from the European Union finally started making progress in late November. Earlier in the year, U.K. Prime Minister started the ball rolling on Brexit when on March 29, she signed the letter that formally began the U.K.’s departure from the European Union.
In September, in a speech in Florence, May said that the U.K. will honour its financial commitments to the European Union while seeking a two-year transition period. She also reiterated the Government’s stance that the U.K. will be leaving the single market and customs union.
In early December, the U.K. and the European Union reached a significant milestone in their pursuit of a Brexit deal, breaking a deadlock that allows talks to move on to a crucial second phase.
The year ended with conflicting feeling about the progress being made on Brexit with PM Theresa May saying the Brexit deal is “good news” for all voters but some politicians saying that she is making a total mess of Brexit.
North Korea-US Threat
Throughout 2017, North Korea conducted a series of ballistic missile tests, despite constant criticism from the U.S. as well as additional trade sanctions. Making progress with each ballistic test, North Korea, on November 29 successfully tested a new type of intercontinental ballistic missile, topped with a “super-large heavy warhead,” which is capable of striking the U.S. mainland.
The initial ballistic tests triggered a flight to safety rallies in gold and the Japanese Yen while encouraging the selling of higher-yielding assets. With each successive test, however, the market’s response became increasingly diminished.