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Investors Bullish on Economy, Markets Under Trump but Expect More, UBS Says

Emily Stewart

Investors want stability and clarity from Donald Trump more than they want tax cuts as the president reaches the end of his first 100 days in office.

A new UBS survey found most investors want to put more cash to work in the markets, but they're waiting for a more settled, focused White House to do so. They're also bullish about the state of the United States economy and the equities markets, regardless of party affiliation.

UBS polled 2,200 people with at least $1 million in investible assets over a week-long period to gauge their take on the Trump administration's first 100 days. These investors are holding around 20% of their assets in cash, and 56% of them want to invest more -- once they see more progress from the White House.

Sixty-one percent of investors said they're waiting for more stability from the administration before they invest more cash, while 48% said they want more clarity on what the government will focus on for the rest of the year. Surprisingly, 40% said they are banking on lower personal income taxes and more infrastructure -- the two factors widely perceived as driving the recent market rally.

"Investors are poised to act, anticipating more progress from the administration on key initiatives that will boost the economy," UBS said in the presentation announcing the results.

Investors are optimistic about the future of the U.S. economy, with 61% of respondents saying they feel good about what's to come, up from 42% last summer. Republicans are the most bullish, with 76% saying they feel positive about the 12-month economic outlook. Nearly half of Democrats say they're optimistic as well.

Sixty-six percent of investors say they feel optimistic about the S&P 500 returns in the next six months, including 78% of Republicans and 57% of Democrats.

The S&P has climbed 4.6% from market open on Inauguration Day through market close on Monday. Many investors have become more worried about missing out on market gains.

While investors are still hopeful about what's to come, they're not exactly thrilled with Trump's performance thus far. Forty-seven percent of investors approve of the job the administration is doing, with a major split between Republicans and Democrats, 77% to 24%.

The investing community appears to like Trump a bit more than the broader electorate -- according to Gallup, the president's approval rating currently sits at about 43%.

On the issues, investors are disappointed with the GOP's failure to deliver on health care. Lawmakers pulled a bill to repeal and replace Obamacare from the House floor in late March and, despite promises, have failed to truly revive efforts.

Ninety percent of respondents said the government should come up with a better solution and that Republicans should have had a better plan in the first place. Sixty-one percent said they'd like to see the Affordable Care Act revised.

Trump has pledged to put forth a $1 trillion infrastructure spending package, and 91% of investors say that's a good thing for the economy. They're less sure about tax reform. Two-thirds say they think the government should focus on tax reform next, but 67% say the health care failure made them less optimistic about the prospects of success.

The White House on Tuesday released a list of what it called Trump's "historical accomplishments" during his first 100 days in office, touting the number of executive orders and Congressional Review Act resolutions he's signed. Investors appear to be waiting for more from Trump before they make up their minds.

Editors' pick: Originally published April 28.

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