Fears about the delayed implementation of some of President Donald Trump’s policies may be weighing on the stock market, but two experts told CNBC on Monday those concerns shouldn’t spook investors.
Barbara Reinhard, head of asset allocation for Voya Investment Management, said there may be some difficulties in the repeal of Obamacare and that tax cuts and infrastructure spending may not occur until later this year or early 2018.
However, people shouldn’t be hesitant to buy equities or rushing to sell them, because the fundamentals are supportive of the market right now, she told “Power Lunch.”
“The underlying earnings strength that you’ve got that’s coming through for the fourth quarter is even better than analyst expectations,” she said, noting that there has been very broad-based sales growth across many sectors.
Plus, the rapid appreciation of the U.S. dollar has managed to calm down, which is positive for earnings, Reinhard pointed out.
Investors hopeful about tax cuts, deregulation and fiscal stimulus piled into stocks after the election, but now there is a realization Trump’s policy agenda may encounter delays.
In an interview that aired on Sunday, Trump told Fox News’ Bill O’Reilly he hoped those tax cuts would be done this year.
“I think so, yes,” he said. “And I think before the end of the year I would like to say yes.”
Bruce Bittles, chief investment strategist at Robert W. Baird, told “Power Lunch” that markets should be looked at from a macro perspective.
“We have a friendlier business environment in Washington, D.C., and that translates to a stronger economy and a better stock market going forward,” he said.
In fact, he believes the uncertainty is healthy for equities.
“It keeps investor sentiment grounded. We don’t get into a bubbly atmosphere, which is always dangerous,” said Bittles.
U.S. stocks were down on Monday after all three major indexes clsoed around all-time highs on Friday.
— CNBC’s Jacob Pramuk and Fred Imbert contributed to this report.