Posted on 04/24/2017 6:55:50 AM PDT by SeekAndFind
The last thing President Trump now needs is for the stock market to go south on him. After all, he’s got worries aplenty: abroad, North Korea, Syria, Russia and Brexit; at home, the stalled effort to repeal Obamacare and uncertainty surrounding “tax reform.” Compared with this tapestry of troubles, the stock market has been a splendid blessing.
It’s called the Trump Rally or Trump Trade. By whatever name, it has been impressive. On Election Day, Nov. 8, the Dow Jones Industrial Average closed at 18,332.74, not much different from a year earlier. By March 1, the Dow hit 21,115.55, a gain of 15 percent. Although stocks are slightly off this peak, the market increase remains about 11 percent and represents roughly $2.7 trillion of paper wealth, reports Wilshire Associates.
To Trump, this must be immensely gratifying. Among other roles, the stock market serves as a general barometer of confidence that is independent of — and can’t by manipulated by — Trump’s nemesis, the detestable “mainstream media.” One message from the market, he doubtlessly thinks, is that he’s doing much better than his critics acknowledge.
The theory of the Trump Rally is simple: He has brightened the economic outlook. Big business and personal tax cuts, combined with relief from over-regulation and higher infrastructure spending (roads, ports), will boost economic growth. Faster growth will raise profits — and higher profits tomorrow justify higher stock prices today. In theory, stocks represent the present value of (estimated) future profits.
But there’s the rub. What if those profits don’t materialize?
Immediately after the election, it was possible (though naive) to think that Trump could quickly convince the Republican Congress to pass his economic agenda. Now, that optimism seems unrealistic. The difficulty of repealing the Affordable Care Act showed the limits of the White House’s power.
(Excerpt) Read more at realclearmarkets.com ...
The Stock Market is being propped up by government spending so as long as Congressturds keep spending more money than is taken in, the stock market will go up.
I put my mutual funds at aggressive shortly after the election and have not been sorry.
If that was true we’d have a bull market forever.
The truth is, the stock market is a reflection of investor confidence, and thanks to Trump, confidence in the American economy is high.
Seems to me that NONE of this stock boom crap, supported by $42.5 billion per month for Mortgage Backed Securities from the FED and the same about buying T-Bills to legitimize a Trillion dollar a year entitlement increase under Obama ALWAYS got the high five, thumbs up bravo from these putzs before. Why not now? No frigging QE and lying and BLS bullshit? Why not now? I’ll tell you why. For UBAMA it was all hype and BS. Trump didn’t do anything for it except work for the American people. It didn’t cost him a trillion dollars a year in deficit entitlement shenanigans to make that all seem legitimate.
Then why did it go up so much under Barky's administration?
It may have been a reflection of overall economic strength before Barky took office, but, since then, it's been propped up by government spending.
Mark my words. When the next "Continuing Resolution" is passed, the Stock Market will skyrocket.
Herbert Hoover was elected president in November 1928. He took office on March 4, 1929. The stock market crashed approximately 8 months after his inauguration on October 29, 1929. Hoover was blamed for the crash and the economic collapse that followed.
The Trump administration will be eight months old in September 2017. The last major financial crisis occurred in September and October 2008 and was blamed on the incumbent president George W. Bush.
The stock market is at an all time high. There are bubbles student loan market, the sub prime auto loan market, and in the residential real estate market. Retail store closures are running at a record pace. The national debt exceeds $20 billion and is growing. The Federal Reserve has been monetizing the federal debt and is artificially suppressing interest rates making price discovery difficult in many asset markets. Globally central banks are manipulating asset prices and interest rates. Billionaire speculators, such as George Soros, manipulate currencies and markets. Many puublic, union and private pension funds in the United States are grossly underfunded at a time when the baby boom generation is retiring and beginning to draw from funds that don’t have the resources to pay the growing number of beneficiaries. Over 90 million people of working age are not in the labor force.
It is very possible there will be a major economic collapse this year in the United States. A stock market crash in the fall will be blamed on Trump and the Republican Party, particularly after months of vacillation on economic policy.
Then why did it go up so much under Barky’s administration?
Because everything else was a worse investment.
Real Estate just suffered a big crash and showed how risky and illiquid it was.
Government bonds were in the dumpster for returns.
Gold is subject to government confiscation, as it was in the 1930’s. It only was made legal to own in 1973!
Unrest all over the world, fostered by Obama, made the American stock market attractive to foreign investors.
Stocks were about the only “safe harbor” place to put your money, which is why people put their money there.
Now, with Trump, people have reason to be optimistic, but interest rates are still very low on government bonds.
Then why did it go up so much under Barky’s administration?
Because everything else was a worse investment.
Real Estate just suffered a big crash and showed how risky and illiquid it was.
Government bonds were in the dumpster for returns.
Gold is subject to government confiscation, as it was in the 1930’s. It only was made legal to own in 1973!
Unrest all over the world, fostered by Obama, made the American stock market attractive to foreign investors.
Stocks were about the only “safe harbor” place to put your money, which is why people put their money there.
Now, with Trump, people have reason to be optimistic, but interest rates are still very low on government bonds.
Then why did it tank before Barky took office?
It’s a bubble, a rather interesting bubble. Large-cap stocks are becoming overpriced due to index-fund investing. Collectively, index funds are spending close to $1 trillion a year buying the top 100 and the top 500 stocks. This is almost certain to push prices up.
It’s real now, and if it goes down, it will be real then, too.
For the past eight years, the Fed Res did not hike interest rates for fear of harming the Obama economy. Trump comes into office and we are immediately scheduled for three .25% rate hikes this year. Each rate hike is like a tax on borrowing money and puts a crimp in business plans, home purchases, and anything that requires credit. Maybe the Fed Res should have gave Trump eight years without a hike too, since now Trump will be fighting not only the current but the waves pounding the beach in regards to economic growth. I bet Trump’s economy prevails in spite of the Fed’s hostile interest rate hikes (while long overdue untimely).
If all the prognosticators around here knew as much as they pretend to they’d all be on their yachts having a party and not here commenting.
I am waiting to see what his tax plan looks like. I really hope that rumors that he is entertaining the dems suggestions that they begin raiding 401K’s is untrue. If speculation is accurate Trump is considering offsetting revenue loss from corporate tax decreases by applying a 15 percent annual tax to 401K income. Seems to me like great stump speech potential for a Sanders/Warren ticket.
Then why did it go up so much under Barky’s administration?
Simple the FED initiated QE1 QE2 & QE3 and pumped 85+ Billion a month over several years into mortgage backed securities sold on Wall Street.
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