Investors Far Too Sanguine on Trump

Former U.S. Treasury Secretary Lawrence Summers said investors are being far too sanguine about the risks associated with Donald Trump’s incoming administration.

The Harvard professor, a Democrat who was Treasury chief under Bill Clinton, cited the possibility of protectionist measures by the U.S. as well as changes to foreign policy and domestic social policy as issues that are creating “extraordinary uncertainty.”

With just over two weeks to go before Trump’s inauguration on Jan. 20, the S&P 500 is close to a record high, having risen almost 10 percent in 2016 on optimism over fiscal stimulus and stronger economic growth. While the Dow Jones Industrial Average has struggled to close at the 20,000 level, it rose 13 percent last year.

Bloomberg

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MS

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Craig Erlam

Craig Erlam

Senior Currency Analyst at OANDA
Based in London, England, Craig Erlam joined OANDA in 2015 as a Market Analyst. With more than five years' experience as a financial market analyst and trader, he focuses on both fundamental and technical analysis while conducting macroeconomic commentary. He has been published by The Financial Times, Reuters, the Wall Street Journal and The Telegraph, and he also appears regularly as a guest commentator on networks including Sky News, Bloomberg, CNBC and BBC. Craig holds a full membership to the Society of Technical Analysts and he is recognized as a Certified Financial Technician by the International Federation of Technical Analysts.