Stocks Could Suffer As Trump Trade Policy Takes Shape

Now signs are emerging from the Trump camp that harsher trade policies that could jeopardize the honeymoon are likely in the offing, and investors would be well advised to give those prospects more weight when gauging how much further an already pricey market has to run.

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If implemented, economists at Deutsche Bank estimate the [border-adjustment] tax could send inflation far above the Federal Reserve's 2 percent target and drive a 15 percent surge in the dollar.

Analysts calculate that, all else being equal, a 5 percent increase in the dollar translates into about a 3 percent negative earnings revision for the S&P 500 and a half-point drag on gross domestic product growth. The dollar index has already gained more than 5 percent since the U.S. election.