Trump: "Time for action!" - Watch to watch for now and how to trade Trump? - Nomura

Analysts at Nomura noted that President Trump said that the time for action had arrived and below is a list of what they will be watching in the days, weeks and months ahead. 

Key Quotes:

Regulation

"We expect Trump to call a pause in issuing new regulations in executive branch agencies. 

We expect Congress to begin the process of deregulation by using authority under the Congressional Review Act (CRA) to repeal regulations that have been issued recently. We think that the energy sector will be a particular focus. 

Trade 

One of Trump’s first trade actions will likely be to formally withdraw from TPP. He will then likely initiate negations with Mexico and Canada aimed at renegotiating NAFTA. We also expect Trump to launch bilateral negotiations on trade and related issues with other countries, notably China. 

We expect the Trump administration to launch a comprehensive review of performance under existing trade agreement. This investigation could lead to the imposition of new targeted tariffs within three to six months. The President has the authority to impose across the board tariffs, at least temporarily. While press reports suggest that the Trump transition team considered this option, we do not think it is likely. We also expect the Treasury Department to publish the next currency report in the next three months. A number of countries may be labeled as currency manipulators, including South Korea, Taiwan and China. 

Immigration

We expect President Trump to overturn, possibly within days, some of President Obama’s executive orders that affected immigration policy. In the next couple of weeks, we expect Trump to come forward with a detailed proposal for a more secure border with Mexico, including the construction of a wall along a portion of the border. Over the next several weeks, we expect the Justice Department (Jeff Sessions has been nominated to be the Attorney General) and the Department of Secretary of Homeland Security (General Kelly has been nominated to be Secretary) to start tightening up immigration enforcement. 

Healthcare

 We expect the Trump administration to put forward a plan to “repeal and replace” the ACA within a few weeks. We expect legislation replacing the ACA to become law within the first quarter. 

Federal Spending 

Trump may put a freeze on Federal hiring very quickly. We expect the President to lay out plan plans for Federal spending within the next few months. Recent press reports suggest that the Trump Transition team has considered deep cuts in discretionary spending outside of Defense and Veterans Affairs. 

Federal Taxes 

Congress, particularly the House Ways and Means Committee, continues to work on tax reform. We expect a draft bill within a couple of months and we expect a major tax reform bill to pass the House by the end of the summer. We anticipate final passage sometime in the fall. At this point, we still expect the plan outlined by the Republicans in the House last June, which includes so-called “border adjustments” to be the basis for the draft bill that we should get in a couple of months. 

Federal Reserve Leadership 

Transition We expect the Trump administration to nominate someone to be the Vice Chair for Regulation within the next few months and possibly another Board member. Supreme Court We expect Trump to make a nomination for the vacant seat on the Supreme Court within the next month."

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