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The “Trump Trade” and the small cap cycle

By: Tom Goodwin, senior research director

On November 9, a day after the election of Donald Trump as president, the phenomenon known to the media and others as the “Trump Trade” came into being. The president-elect’s proposed package of tax cuts, infrastructure spending and deregulation was expected to boost aggregate demand and business investment spending. US stocks rose substantially with small caps leading the way. However, half way through 2017 expectations that the president’s proposed agenda will get through Congress intact have faded, yet the market has continued its upward march. So what happened to the Trump Trade?

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