RISKS RELATED TO TRUMP ARE KEEPING MANY ON SIDELINES.

He thinks markets would have likely seen a relief rally if Clinton had won, but it would have also probably meant a continuation of the gridlock in Washington that plagued the Obama administration.

Rather than crediting a Trump “hope” trade rooted in expectations of lower taxes for the gains since early November, a growing mark.

“The U.S. equity market has climbed on the back of earnings strength, combined with supportive economic data amidst skeptical sentiment,” said Tobias Levkovich, chief U.S. equity strategist at Citigroup. “Therefore, fears of a major pullback if President Trump does not outline a ‘phenomenal’ tax program on February 28th may be overdone.”

An overhaul of the U.S. corporate tax code would likely include a reduction in the headline corporate tax rate from 35 per cent to as low as 15 per cent — the level Trump is pushing for.

Keith Parker, U.S. equity strategist at Barclays, noted that the S&P 500 rallied 40 per cent in the nine months following Ronald Reagan’s tax cut of 1986, a period that included a stock market crash. The index climbed more than 50 per cent after the plan was implemented in 1988.

However, he believes the market would price in the benefits much faster this time around, and potentially weaken depending on what the broader tax changes look like.

“The negative effects of a border tax, if one is included, would likely see markets consolidate as EPS would not get much a boost from the plan,” Parker said.

While the Trump plan may not have the advertised effect going forward, it’s clear that markets have been moving for some time.