The equity markets have posted some impressive gains since the presidential election on 11/8/16. Some in the financial media have dubbed this period the "Trump Rally."

The S&P 500 and S&P SmallCap 600 Indices were up 23.5% and 24.7%, respectively, from 11/8/16-11/7/17. For comparative purposes, from 1926 through 2016 (91 years), the average annual total return on the S&P 500 Index was 10.04%, according to Ibbotson Associates/Morningstar. It was 12.12% for small company stocks.

While it would be difficult to know exactly how much of the rally in U.S. stocks can be attributed to Donald Trump becoming the 45th president of the United States, we do believe that he has at least injected some optimism into the equity markets via his pro-growth, pro-U.S. policy agenda.

President Trump's agenda includes such initiatives as repealing and replacing the Affordable Care Act, which the Republicans were unsuccessful in doing over the past year, corporate and individual tax cuts, which have been outlined but not voted on by Congress, and infrastructure spending, which could come some time in 2018 depending on the outcome of the tax reform effort. 

On 9/30/17 (latest data point), the NFIB Small Business Optimism Index stood at a reading of 103.0, up from 94.9 on 10/31/16, just prior to the election. In its September release, the NFIB Research Foundation noted that small business owners still expect policy changes from Washington, D.C. that improve their standing with respect to health care and taxes. 

One thing that we do know is that technology was not one of areas of the market that was initially supposed to benefit from Trump's policy initiatives, and yet it was the top-performing sector in the period, up 41.0% on a total return basis. 

Tax reform is front and center and the clock is ticking. President Trump and the Republicans need a major legislative win, in our opinion. Keep in mind, we have mid-term elections coming in 2018.