title: Trump promises tax relief, immigration overhaul in Congress address
text: (Reuters) - President Donald Trump opened the door on Tuesday to a broad overhaul of the U.S. immigration system and vowed to pursue massive tax relief for the middle class in a speech to Congress as he sought to rebound from a chaotic start to his presidency.     Trump said he was open to a broad overhaul of the U.S. immigration system, a shift from his hardline campaign rhetoric. He emphasized his desire to focus on problems at home by boosting the U.S. economy with tax reform, a $1 trillion infrastructure effort and an overhaul of President Barack Obama’s signature healthcare law, known as Obamacare.    BRIAN REYNOLDS, CHIEF MARKET STRATEGIST, NEW ALBION PARTNERS, NEW YORK “The speech showed the softer side of the President, but I think the media had let investors know this would be the case, so no surprise for markets on that front. “The speech lacked specifics as it related to financial markets. Again I don’t think that is a surprise. “With no surprises and few financial specifics, it is likely that equity investors will focus on how many of his themes can be passed by Congress given how late it is getting in the legislative calendar. Skepticism over the likelihood of policy enactment may create a brief pullback in stocks at some point. “There was nothing in the speech, or in the President’s agenda, that is likely to alter the behavior of corporate bond investors, who have been driving this equity bull market for eight years via debt-fueled buybacks. They bought a strong $18 billion of new corporate bonds on Tuesday in advance of the speech, and they will likely be back at work on Wednesday, putting their cash flows to work. I believe that these flows are likely to keep any stock market pullback brief and shallow.” BUCKY HELLWIG, SENIOR VICE PRESIDENT, BB&T WEALTH MANAGEMENT, BIRMINGHAM, ALABAMA: “The speech was a summary of Trump’s policies.  Stocks could move higher tomorrow as nothing has changed and stock investors are still expecting infrastructure build out, tax and regulatory relief, and changes in Affordable Care, but the timetable has not been clarified for these. Republican constituents may pressure Congress to step up the pace in moving the Trump agenda forward. “Some specifics: pressure on drug margins, completion across state lines for healthcare organizations, military expenditures increasing – but nothing new here. “Fed policy will get more attention this week and next.  Manufacturing PMI tomorrow and employment report next Friday (March 10) will be watched.  Yellen will be speaking this Friday.  Fed funds futures showing a higher probability of  an increase at the FOMC March 15 meeting.” J.J. FELDMAN, PORTFOLIO MANAGER AT MIRACLE MILE ADVISORS IN LA: “There was nothing really new,” he said. “It was a good speech in that it was more uniting than divisive but from the market perspective it was status quo,” “This probably wasn’t the venue but if new details on tax reform are not coming soon there’s going to be disappointment for sure.“ JUAN PEREZ, SENIOR CURRENCY STRATEGIST, TEMPUS CONSULTING, WASHINGTON: “Trump said a lot of things that are positive for financial markets such as spending a huge amount for infrastructure. Overall there were no real surprises as these are pronouncements that we have heard before. However, I expect that market gains from his speech would be subdued by the continued tone of protectionism in his statements. Anytime, you attack trade deals as Trump did, the market gets nervous.” PAUL CHRISTOPHER, HEAD GLOBAL MARKET STRATEGIST  AT WELLS FARGO INVESTMENT INSTITUTE IN ST. LOUIS, MO.  “I was impressed though, or at least relieved, that it wasn’t like his inauguration speech, it wasn’t a challenge or a gauntlet thrown down to the opposition or to other countries. It was a speech that was more balanced and more presidential-sounding.  “But even as a state of the union address, which it sounded a lot like, it wasn’t very specific. It especially and could have and didn’t prioritize all of these different things he was talking about. Some of the policies are going to be very expensive - a trillion dollars for infrastructure, $100 billion a year, extra defense spending - the budget may not have room for all of that.  “He didn’t talk at all about how they were going to fund any of that. He also didn’t talk about tax reform, which I expected he would give Congress some marching orders in terms of what he wants - he hardly said anything about tax reform.  “He talked about the Affordable Care Act but again he didn’t talk about any of the directives of are we going to repeal and replace now or repeal and replace later. He did say he wanted continuity but moderate Republicans are not convinced the conservative Republicans have that as a priority. So it may be even difficult to pass the ACA repeal in this budget bill.  “He was effective at reaching out to the other side, he was effective at times in being able to connect items. For example, connecting education as the way to break the cycle of poverty and then morphing or transitioning into violent crime and cutting down on that. Those were effective points and effective transitions.  But again not enough detail for investors and certainly the markets were chopping around while he was speaking. It wasn’t a big market mover and we still have to wait for the details. I don’t think we are going to see much change.  “There is no reason to sell, he didn’t throw water on any of the agenda, he simply didn’t clarify it any.” “I think the market is going to be positive. The market continues to see him as a good-for-business president. He’s very pragmatic when it comes to business. In terms of getting these grand visions done, I don’t think the market gives so much importance to that. When he spoke about cost cutting, that immediately resonates with everyone on Wall Street. That’s easy stuff. That’s low hanging fruit. It’s really hard to grow revenues. But it’s really easy to cut costs. There is so much fat. It’s so over regulated. This is easy stuff. He said enough of that during the speech that he will resonate well. “I think some people were probably looking for some meat on the bones. He definitely covered everything. It was more of a laundry list. There wasn’t a lot of details. “To me, the tax reform is something everybody wants. Repatriation of money abroad is something that ever wants. Why not take care of those and then take care of the dicey things? Like Obamacare and immigration.” OMER ESINER, CHIEF MARKET ANALYST AT COMMONWEALTH FOREIGN EXCHANGE IN WASHINGTON DC “(Trump’s) mention of historic treaties and NATO specifically was reassuring for our allies globally, and in that sense it was probably reassuring for global financial markets as well.” “(The speech) was still probably light on actual details on the fiscal side of things. We got mention of a trillion dollar infrastructure spending package. I think it’s very early so I wouldn’t necessarily hang my hat on that number. It was largely absent of any major focus on the tax side of things. In terms of overall details, on the fiscal side of the equation, it was probably pretty light. But I think despite that on some level the market might be reassured by the more or less balanced tone of the speech. It was much more presidential than some of the previous speeches and commentary we’ve gotten from the president.” PAUL NOLTE, PORTFOLIO MANAGER AT KINGSVIEW ASSET MANAGEMENT IN CHICAGO “The devil is going to be in the details and I think that’s why you didn’t see the futures move too terribly much. The markets are still, show me what you are going to do, how is this all going to work and how are we paying for it. That’s going to take probably a couple weeks to a couple months to get laid out.” “Everybody is looking for more details and we’re still waiting.”  “I think expectations right now are really high all the way around and it’s going to be a process. We’re going to have to wait to see some of this develop.” STEVE MASSOCCA, SENIOR VICE PRESIDENT AT WEDBUSH SECURITIES IN SAN FRANCISCO  “I thought it went pretty well, certainly no land mines or explosions.” “From an investor’s perspective there was no new information, no surprises good or bad. From the perspective of where money goes tomorrow, I don’t see what we have learned that’s new or different. ... But he burnished his image, so there’s a positive there. He’s a pro business president so that’s a good thing.” RANDY FREDERICK, VICE PRESIDENT OF TRADING AND DERIVATIVES FOR CHARLES SCHWAB IN AUSTIN, TEXAS “He pretty much didn’t say anything he hadn’t said before so markets have no reason to react overly positively or overly negatively ... Would the market have liked details sure, but I don’t think it was expecting them.”  “If anything the market might move moderately higher tomorrow. It pulled back moderately today. The uptick in volatility today was a preparation for the potential for a downside move ... It was a little bit of hedging going on before an event that could move the market.”  A key focus for Wednesday will be Personal Consumption Expenditures, a key inflationary measure that the U.S. Federal Reserve watches, Frederick said. BRIAN JACOBSEN, CHIEF PORTFOLIO STRATEGIST AT WELLS FARGO FUNDS MANAGEMENT IN MENOMONEE FALLS, WISCONSIN:  “He was surprisingly detailed about what to replace Obamacare with. It’s likely Congress will be able to take that up shortly as part of the 2017 budget and then quickly pivot to the 2018 budget which will deal with tax reform. That plan is much less developed, but he has time.” On taxes, Jacobsen said: “Every deduction and credit that would need to be eliminated to lower tax rates in a budget-neutral way has strong defenders. That’s how those deductions and credits got there. So, we’ll just have to watch and wait to see which special interests President Trump will take on.” TIM GHRISKEY, CHIEF INVESTMENT OFFICER OF SOLARIS GROUP IN BEDFORD HILLS, NEW YORK. “It seemed to be a somewhat kinder and gentler Trump. He wasn’t attacking individuals like he often does.” “This remains a very pro-growth agenda and the markets like that, but I didn’t hear anything new that would make it necessarily move ahead, except that he stuck to his guns to make his agenda items happen.” STOCKS: U.S. stock futures were stronger at the start of Trump’s address, with major indices 0.3 percent higher. They eased those gains as he spoke, with the S&P 500 E-mini futures last up 0.2 percent.  BONDS:  U.S. Treasury futures TYv1 dipped slightly ahead of his speech, and were last down 0.4 percent. FOREX: The dollar erased its earlier gains in Asia, with the market jittery as Trump’s speech was short on details on his economic stimulus. The dollar/yen eased to around 112.80 yen JPY= from the day’s high of 113.375 yen hit earlier, on hopes the Federal Reserve may raise interest rates this month.  