October 1, 5:00 pm EST

Given the global nature of business within the Dow constituents, the DJIA has been the place for pain, as uncertainty over trade has ebbed and flowed over the past year.  So, with a new trade agreement with Mexico and Canada, we get a big rally in the Dow today.  That puts the Dow up 7.8% on the year.

Still, we came into the year expecting something much bigger for stocks.

The big tax cuts that came near the end of last year, have indeed translated into big corporate earnings surprises, and a hotter than expected economy.  This is something you would expect to be fuel for a much bigger than average year for broader stock markets.  And you would expect it to be fuel for a big run in commodities markets.  But the stock market performance is sitting right around long-term average gains.  And broad commodities performance (if we look at the CRB index) is up just 2% on the year.

This has all been supressed by the uncertainties surrounding trade, and the resulting rising geopolitical tensions.

But with concessions from Europe on trade earlier in the summer, and now a new agreement on North American trade, Trump is clearly winning on trade. 

What’s next?  Infrastructure.  This has been the next pillar of Trumponomics.  Gary Cohn, the former White House economic advisor, said he thinks the White House will get it done ($1 trillion+) regardless of who controls the House after November.

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