text: FIM, the Finnish manager with an office in Stockholm since 2005, and which offers emerging and frontier strategies, has highlighted how the ongoing presidency of Donald Trump means both great optimism but also great uncertainty for markets.
  In its latest house view note, the manager said that "for the first time since 2011, economic growth seems to be rising across all regions globally." Together with the ongoing expansionist monetary policy it means that the key risk to equity investors becomes to what extent Trump's finance, trade and foreign policies are negative for markets.
  What has become clearer as time goes by is that the more radical policy proposals put forward during the election are being stymied by the reality of judicial checks and the fact that while controlled by the Republican Party, the US Congress has become a barrier to Trump's unorthodox method of politicking, FIM suggests.
  Looking forward, the manager suggests that it will be Trump's tax plans that will be the first real test of his presidency. A significant lowering of corporation tax would have a direct positive impact on company results and an indirect positive impact on economic activity, FIM said. However, the level of tax cuts will depend on thoughts about how to finance the deficit that those cuts will create in the US federal budget.
  One proposal might be a border tax, but that would have severe implications for global trade and trigger a wave of protectionism that would hit global growth.
  The issues facing investors are not limited to Trump: FIM highlights the pending election season in Europe as a watershed moment. French government debt spreads against German bunds are now at levels last seen in the wake of the eurozone crisis in 2012, following market concerns over a win by Marine Le Pen in the upcoming French presidential elections.
  That said, FIM argues that Europe's traditional, centrist parties will be able to stave off the political threat they now face.
  "Last year, we learned to be sceptical towards Gallup polls. Despite that we believe that it is highly unlikely that changed political power balances will be a significant risk in the euro area. We are likely to look back on 2017 as a year when the traditionally large parties that were in favour of unity in Europe strengthened their positions. Regardless of who comes to power, the election promises suggest economic reforms, increased government spending and tax cuts. That will strengthen faith in economic growth in Europe, which has been strong recently."