The 45th President of the US is not known for modesty, so Donald Trump would, in all likelihood, be the first to suggest his presidency is the reason the US equity market has soared to new highs and why the US economy is so buoyant.
But his critics – of which there are many – would point to the fact Mr Trump has not managed to pass much in the way of legislation since his inauguration on 20 January 2017, and that markets tend to operate outside the President’s influence.
As if to demonstrate this, political uncertainty dominated news flow last year, yet equity markets appeared to ignore the noise and continue rising.
Ryan Paterson, research analyst at Thesis Asset Management, suggests: “We must be careful not to give too much credit to Mr Trump when it comes to his influence in the markets, as very little of his economic agenda has yet to get through Congress.
“While investors celebrated the pro-business parts of his agenda, such as tax reform, deregulation and infrastructure spending, the stockmarket has been carried higher by strong corporate profits and a healthy economy both at home and abroad.”
During the presidential campaign trail, Mr Trump promised much in the way of reform.
Mark Sherlock, portfolio manager of the US SMID (Small and Mid) Cap fund at Hermes Investment Management, recalls when Mr Trump came into power at the start of 2017, the president had four main economic agenda items.
“The first was a reduction in corporate taxation, the second was a reduction in taxation on repatriated cash that was held overseas, the third was to do with deregulation and the fourth was to do with infrastructure investment,” he lists.
He suggests that in the fourth quarter of 2016 there was an overly optimistic sentiment in the market that all of these would be “quickly won battles and the reality is it takes a lot longer”.
Perhaps in the knowledge a legislative win would not come easily, in the early days of his presidency, Mr Trump’s focus was on issuing a raft of executive orders, setting the tone for his tenure in the White House.
Dan Kemp, chief investment officer, EMEA at Morningstar, notes the wave of executive orders signed by Mr Trump impacted on everything from immigration to trade.
“The number and scope of executive orders triggered (17 in January alone and over 50 in total) has firmly put to rest any hope he would back away from his more extreme campaign pledges. A cynical outsider might say Mr Trump has tackled his first year as president like a seven-year-old would a marathon.
“Whatever your opinion of his first year in office, Mr Trump is clearly a man on a mission.”
“Therefore, with such a newsworthy approach, it is little surprise that politics has meaningfully impacted sentiment,” he acknowledges. “However, we firmly believe it is imperative to look through this noise and realise that politics rarely has a significant impact on the fundamentals.”