A new US President cycle has quite a defined pattern in history – whoever the President is.
Phase 1 – The promise
Form election day to a few weeks after Inauguration day.
It is the period where the President-Elect delivers his promises.
The market can react good or bad, but it set the following pattern. If it starts on a positive note, usually the market retrace as the President cannot maintain all its promises – if it starts on a negative note, usually the markets rally as the President cannot maintin all is threats.
Phase 2 the delivery
This is the next 100 days (May 2017)- where the deal-making will make possible (or impossible) the delivery of the promises. It will be volatile as the Democrats and the media will do anything possible to damage President Trump and set the tone of his defeat in the mid term election
Phase 3 -The enactment.
This period last between 3 and 6 months (so say till end of 2017).
This is when the promise/threat will start to really deliver and the Fed really respond to residential policies. Usually the market movement are quite out sized in respect of the policies.
Phase 4 – the economic impact
Any change (tax, investment) in reality as a lag between 8 and 12 month. So it is the second year (2018), which usually is the best for the market as the economic plans start really to deliver an impact
Phase 5 – the slowdown
As the presidential policies effect start to wane (also due to the fiscal stimulus tapering) the growth (and stock market) slow down.
Please note this is mere stats and nothing to do with President Elect Trump in particular
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