Markets to remain in 'wait and see' mode - for now

"BUY the election, sell the inauguration", mentioned in this column last week, appears to have been the preferred trading strategy - at least on Wall Street. The reflation play founded on hopes of large fiscal stimulus from the incoming administration seems to have floundered over the past three weeks. Except for the Nasdaq Composite, the major indices fell.

The other theme featured here previously was this: If the Trump administration starts a trade war, then it is probable that Asian markets will decouple from or at least reduce their reliance on Wall Street. Following Friday's inauguration speech by Donald Trump when he emphasised that he will place America's interests ahead of everything else, a decoupling in the months ahead now looks increasingly likely. Still, without any specifics, it is difficult to say with any certainty.

After a large run-up following the Nov 8 elections, the US market received a hefty dose of reality when then-president elect Mr Trump, in his first press conference since Nov 8, failed to say anything about his approach towards managing the economy, prompting investors to pull back until greater clarity unfolds.