Trump speech boosts stocks, ahead of details

President Trump gestures as he arrives on Capitol Hill in Washington, Tuesday, Feb. 28, 2017, for his address to a joint session of Congress.

Stocks are comfortably higher this morning after President Trump's speech to Congress: the Dow Jones 30 stocks are over 21,000 for the first time, the S&P 500 is approaching 2,400, both up more than 1% from last night.

Trump's "most traditional and optimistic speech to date" unfortunately "lacked details," but markets were still up thanks to "the tone, which was less confrontational and more optimistic" and appealed to voters who haven't so far supported Trump, wrote Brian Gardner and Michael Michaud, who write the daily Washington Update for clients of New York investment bank Keefe, Bruyette & Woods Inc. 

"The lack of detail on the Administration's tax plan and a position on the Border Adjustment (imports) Tax will leave congressional Republicans confused and disorganized" until Trump drafts details, and could even "doom" BAT, they added. "The trade discussion was less overtly protectionist," which should be good news for Walmart and other importers. "There was no mention of Dodd-Frank" bank regulatory relief. 

"President Trump seemed to endorse House Speaker Ryan's plan for repealing and replacing the Affordable Care Act," including "the use of Health Savings Accounts." 

The President was "darker" about immigrants, but held out hope to fans of "legal immigration," which should boost American builders who mostly employ foreign-born labor, the KBW analysts concluded.

Trump's speech was "positive for defense and security stocks," analyst Brian Ruttenbur, who covers aerospace and defense stocks for Philadelphia-based Drexel Hamilton, told clients in a separate report.

Trump's proposed 10%, $54 billion increase in Department of Defense spending "should be a positive for all the defense-related companies," Ruttenbur wrote. Since a mere wall won't stop illegal immigrants, "we see a likely increase in security screening equipment."

Tax cuts, he concluded, are extra important to U.S. military contractors since they are more likely than multinational manufacturers to "pay a full federal tax rate." Trump is suggesting they should get a break.