Viewers nationwide strongly approved of President Trump’s speech Tuesday night, with many Democrats joining Republicans in calling it “presidential” and positive in tone. Republicans and Independents found it “unifying,” though Democrats were slower to come around on that measure.

The President gained support for his policy plans among viewers: Interviewed before and after the address, they came away from it more positive on his ideas for the economy, immigration, terrorism, crime and Obamacare.

As is often the case in addresses to Congress, those who watched were more likely to be from the president’s party – in this case, Republicans. And they described a president they felt was keeping campaign promises and offering an “inspiring” message.

While half of Democrats found the speech “divisive,” about one-third of them also said Mr. Trump was “specific” and “knowledgeable”; neither label drew a majority, but nonetheless sizeable numbers compared to the more negative reactions Democrats have had to other aspects of his presidency.

And viewers of all stripes described the speech as at least somewhat positive in tone.

Overall, most watchers approved of the speech. Republicans did tune in to watch it in much greater numbers than Democrats (as a president’s party typically does) which bolstered those approval numbers. Forty percent of Democrats at least somewhat approved; 18 percent strongly approved.

The president moved opinion among viewers on his plans for a number of policy issues, comparing their views before and after the speech. The percent favoring his plans for fighting terrorism, addressing crime, improving the economy, handling illegal immigration, and dealing with Obamacare all jumped. 

Republicans and Democrats did see the president’s description of the country quite differently. Most Republicans think Mr. Trump’s depiction of the state of America is accurate, while six in 10 Democrats think the President’s description is worse than the country really is.

There is agreement across party lines that Mr. Trump is trying to do what he said he’d do during the campaign.

David Fuller's view

Rub your eyes, gently pinch your cheek – yes, you are not dreaming – Trump actually gave a good presidential speech.  He deserves credit for this, and I think those behind the scenes, probably including sensible daughter Ivanka and Reince Priebus, Chairman of the Republican National Committee, deserve even more credit for keeping Trump focussed and on track.

Interestingly, the real, politically moderate Trump featured in this speech.  I assume Bernie Sanders loved his promise of a $1trillion infrastructure bill, presumably over two terms.  I imagine the Democrats’ Trump impeachment files will quietly be placed in boxes for at least the short term.     

What about the markets?

Here is my comment from Monday 27^th February, in response to the article: Trillions of Dollars Are at Stake When Trump Speaks to Congress, from Bloomberg:

Tuesday’s speech on the last day of February will be revealing in terms of both sentiment and liquidity.

In terms of confidence, investors will be looking for clear confirmation that their decision to bid Wall Street significantly higher following Trump’s election is confirmed by promises of tax cuts, infrastructure spending and stronger GDP growth ahead.  That is what investors are expecting and it should not be too difficult for Trump to provide these reassurances in a coherent manner.

The next question concerns the extent to which this has already been discounted?  If Wall Street weakens on encouraging economic policies and projections, we will know that demand has at least temporarily been matched or even exceeded by supply.  However, if Wall Street closes Tuesday’s trading with further rallies, we will have at least near-term evidence that demand still has the upper hand. 

Either way, I do not think that there is a significant near-term downside risk.

Some people are already quibbling about the lack of details from Trump, not least regarding how his administration will finance the programmes outlined last night.  These are legitimate questions but the speech to Congress was not the occasion for forensic details on funding. 

People on Wall Street were desperate for a Republican President, of any description.  That the current Republican President can also be presidential is an additional bonus. 

Looking at the S&P 500 (weekly & daily) or just about any other diversified US Index showing a similar pattern.  We have had a demand dominated environment since Trump’s election on 8^th November.  Today’s explosive upside extension is so powerful that we need to ask if it is climactic. 

The next few days will answer this question.  If demand still holds the upper hand, today’s rally from a potential runaway gap on the daily chart above will be extended.  However, if the rally is quickly reversed, let alone by a decline below 2350 for the S&P in the next few days, today’s surge will be confirmed as an exhaustion gap. Even in this event I would not expect more than a reaction and consolidation this month.

Looking further ahead, the halcyon days for stock markets face more obstacles, including six months of less favourable seasonal factors in 2Q and 3Q, rising interest rates and a stronger US Dollar Index. Nevertheless, there should still be plenty of selective opportunities for bulls, including buying opportunities created by setbacks.