Weighing the Pros and Cons of Trump's Effect on Stocks

As Donald Trump's presidential priorities become clearer there will be a greater likelihood of an upside surprise, says Lowell Yura, head of multi-asset solutions at BMO Global Asset Management. The bad news is the lack of specifics around foreign trade increase risk to the down side. In Yura's view, global equities have further upside and he is overweight them relative to bonds. Drilling down, he says he favors U.S. equities relative to foreign equities given the divergences between central bank policies and upcoming European elections. Unless there is a major reversal in economic data in the coming months the Fed is likely to get on with a hike in December, according to Yura. Foreign central banks have a much more challenging environment than the Fed, however, and will continue to wade into new territory with untested policies.