S&P 500 Technical Analysis – The stock market looks forward to Trump’s policies
Fundamental
Overview
The S&P 500 soared into
a new all-time high following Trump’s victory and the red sweep as the market
started to look forward to bullish drivers like tax cuts and deregulation.
One potential bearish
reason people are looking at is rising Treasury yields. That’s generally bearish
when the Fed is tightening though as the market looks forward to an economic
slowdown.
Right now, the Fed’s
reaction function is that a strong economy would warrant an earlier pause in
the easing cycle and not a tightening. That should still be supportive for the
stock market.
If the Fed’s reaction function
changes to a potential tightening, then that will likely see the stock market
correcting lower.
