MARKET IS FOCUSED ON HOW TAX REFORM WILL ADVANCE.

term, the prospect for future gains may be muted by uncertainty. It’s simply hard for businesses to invest in their long-term growth when they don’t have clarity about the policy framework.

“To some extent, investors are seeking that sort of clarity,” Reiman said, highlighting the health-care landscape, tax reform, and infrastructure spending. “I think it’s a little early to make these policy shifts reflected in investors’ portfolios.”

Despite Trump’s recent wavering, it looks unlikely that NAFTA will be revoked, although the U.S. will continue to take an increasingly

The Canadian lumber sector is a perfect example, as tariffs handed down by the U.S. government bring a long-standing dispute back to the surface.

While trade has dominated the headlines in Canada, tax reform is what the U.S. equity market has been waiting for.

In the immediate wake of the election, high-tax companies in the U.S. performed much better than low-tax companies. But as the as the Affordable Care Act repeal lost momentum, and the Trump administration’s tax plan became less convincing, high-tax companies started to underperform.

Much of the uncertainty stems from divisions within the Republican party, despite the optimism a unified government generates.

The market is focused on how tax reform is going to advance: What will be included, and what won’t.

The White House unveiled its plan this week, with some of the highlights including a reduction in the capital gains tax rate for high earners, and slashing the corporate tax rate to 15 per cent.

Trump reiterated his desire to repatriate approximately US$2.6 trillion in corporate profits being held abroad with a one-time tax rate. Yet it isn’t clear whether this will happen over several years, or all at once.

The rate for this onetime tax on foreign earnings hasn’t been determined, with Treasury Secretary Steven Mnuchin only saying it will be “very competitive.”

“This plan looks rich at first take in terms of the costs in revenues, and fiscal hawks in Congress might not fully buy into the claim that accelerated growth will ‘pay’ for the cut, particularly in a U.S. economy already closing in on the limits of full employment,” said Avery Shenfeld, chief economist at CIBC World Markets.

He believes passing something close to this package will be a challenge and that a lot of negotiation is ahead. It does, however, mark a step toward the corporate tax reductions that have been baked into equity valuations.

The world’s largest economy has demonstrated steady improvement in the past few years, and Trump took office at a time when global growth was accelerating. So it’s hard to say that the Trump administration is responsible for the stock market’s gains.

And with so much left up in the air, it’s simply too early to handicap the outcome of the White House’s policy goals. So for now, investors would be wise to focus on the economy, not Washington. After all, it’s only 1,284 days until the next U.S. presidential election.