Less than positive indicators
High expectations may be dashed as anticipated business development is not as good as expected and optimism about tax cuts may be overblown. Treasury Secretary, Steven Mnuchin believes that the stock market will tumble if tax cuts are not passed. It probably won’t be due to this alone but there are other signs that can’t be ignored.
As a team, we believe we’re going to see major sell-offs (in specific sectors) as investors rush to get rid of stocks when their expectations are disappointed. The overall market may not see a massive downturn; however; This can be temporary very punishing to stocks.
Anticipations can work against you
Positive sentiment is good but unrealistic anticipations can work against you. Hope in Trump’s policies may offer disappointment because it’s unclear what will be accepted by Congress or not and his programs are deficient on details. Swift action may be taken as investors attempt to rid themselves of stock. Sometimes a 3% earnings miss can cause a stock to fall by 20 or 30% or even more.
