The markets have been patiently awaiting details of President Donald Trump's tax and infrastructure spending policies. There were two opportunities to offer even modest guidance—the Steven Mnuchin Senate hearing and the president's inaugural address—and traders were disappointed on both fronts.
Trump delivered one of the shortest inaugural addresses in modern times, and the markets drifted lower. The problem: The speech was long on protectionist talk, but very short on specifics and what exactly his priorities would be.
The President said we must protect ourselves from countries that are weakening U.S. companies and destroying American jobs, and that protection will lead to great prosperity and strength.
But stocks have been sideways for over a month because traders have wanted more specifics on the issues that would matter most to earnings: Tax cuts and infrastructure spending. Unfortunately, they heard precious little on those issues from President Trump.
As a result, several sectors that have done well since the election—like aerospace and defense, and building and construction stocks, all considered "Trump stocks"—moved sideways to lower in the afternoon because of the lack of details.
Does this mean the Trump rally is over? Not at all, but it certainly gives reason for pause. If the president's early priorities are built around repealing Obamacare, and a fight over trade policy, it could be a very long winter for stock bulls.