Why is the 2018 State of the Union address important to traders?
The State of the Union address always offers valuable insights into the president’s economic and political priorities. This year is particularly pivotal, though, as it will be Trump’s first State of the Union speech and follows a volatile first year in office. Traders will be watching to assess:
Trump is expected to make statements on a wide-range of policy issues, including:
- how he assesses his first year of reforms
- his plans for the years ahead
- his vision for America
He may use this year’s speech to announce major reforms to trade, infrastructure, healthcare, or welfare policy – all of which are under review.
The opposition reaction
The opposition reaction to Trump’s speech will also be key. Republicans have a razor-thin majority in the Senate and will require some support from Democrats to pass certain bills. There are also elections for the House of Representatives this year, which have the potential to further undermine his position. So it is possible that Trump’s speech will be more conciliatory in tone than some of his previous speeches, though that does not guarantee it will be well received.
The future of the presidency
Though he is unlikely to address the future of his presidency directly, the speech offers a chance to see whether Trump comments on concerns over his mental health and the FBI’s ongoing investigation into Russian collusion in the US election. Any comment risks adding fuel to the fire, which could undermine confidence in the president and play into market sentiment regarding his plans.