Posted on 01/12/2017 2:36:41 AM PST by expat_panama
Part of Donald Trump’s fiscal policy targets mainstream America, not asset classes such as the stock market, bond market and real estate as monetary stimulus does.
The stock market has rallied since the presidential election on expectations fiscal-stimulus policies proposed by Donald Trump will benefit the economy. That might be justified, but that doesn’t mean the stock market can continue to rally in the short run.
Longer-term positive influences from fiscal-policy improvements, instead of monetary-policy stimulus, are clear. Still, those positives won’t be immediate.
Part of Trump’s fiscal policy targets mainstream America, not asset classes such as the stock market, bond market and real estate as monetary stimulus does...
...the groundwork for new U.S. manufacturing jobs takes time...
...When monetary policy tightens, it has an immediate negative influence on economic growth...
...investors seem to be ignoring the risk associated with Trump’s interest in negotiating better trade deals...
...trade wars are not healthy for companies’ earnings growth.
We are extremely concerned that the stock market has reacted prematurely and that it is ignoring immediate risks. We recognize that there is monetary stimulus still coming from the European Central Bank, and in our opinion that is the only reason that the stock market is at a high 25 times earnings. Otherwise a material correction would be part of this warning.
A decline of 5% to 7% in the Dow Jones Industrial Average DJIA, +0.50% the S&P 500 Index SPX, +0.28% the Nasdaq-100 NDX, +0.30% and the Russell 2000 Index RUT, +0.17% is therefore possible, based on what we have defined as the “Trump dump,” which may begin almost immediately.
(Excerpt) Read more at marketwatch.com ...
Buying opportunity as the market takes a breather? These turds are getting to sound more and more like color personalities for ESPN.
There is a lot of cash sitting on the sidelines inside and outside this country, to say nothing of labor. When all of that goes into motion there will be an expansion of the economy. Be on board or don’t be, up to you.
Agree. One can see it however they wish but undeniably the Fed floated the 0bama regime with Trillions in support. Devoid of any motive (which may or may not be realistic) the fact is the Fed has to “reel in” the Trillions in extra money they used to keep 0bama from sinking like a rock. If they fail to the inflationary pressure of those Trillions will begin to be felt. So, realistically, the “Trump rally” wont actually begin until the Fed has essentially been “paid back” for the excesses during the 0bama era.
I am sure there are forces and effects of which I am ignorant but I doubt they can match the impact of Trillions of what is, realistically “debt” the Fed “loaned” (involuntarily) to the US to prevent a total collapse of the US during the 0bama regime. Not saying there wont be a Trump rally but the hole we are starting from is the deepest in history. The question is, “How fast can it be filled?” The next question is what can be done to prevent to Fed and the proglodytes from just digging a new one in 8 or 12 years?
Not saying there wont be a Trump rally but the hole we are starting from is the deepest in history.>>>>>>>>>>>>>>>>>
I expect that it will take an entire Trump first term
to begin to see daylight out of the Trillion Dollar hole and in his second term he will be able to protect America from ever having such deficits run again.
The question is what will the fed do next. Our kind lady is an Obama appointee, and if she raises interest rates precipitously, then she will be a candidate for The Apprentice.
I wonder who Trump will replace Janet Yellen with, and also wonder if she will be gentle during her remaining tenure.
Party like it’s September 2007. That really hurt a lot of upper middle class Americans, the ones I know have mostly recovered a bit, but another bank run might wipe out their recovery.
All these writers... If they knew what the market was going to do, they wouldn’t still be working. They’d be sipping pina coladas on their yachts.
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Exactly right. They make a little bit of money by writing, not a lot of money by investing.
Good observation. Democrats hypocritically tout whatever things they think will get them in power so they can run everyone else’s lives. Its all about power and control.
If they thought illegal immigrants were going to vote Republican, they wouldn’t let a single one in the country.
The big four catalysts increasing optimism and driving the market higher are:
1. Elimination of many burdensome and costly regulations
2. Reduction in personal and corporate taxes
3. Improved US employment outlook
4. A business friendly administration
Combined, these are powerful forces that will release animal spirits. The current run up may have slowed down, and we may see a correction soon as the market is richly priced, but the long term outlook for stocks is very positive in my opinion.
I am sure there are forces and effects of which I am ignorant
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To the contrary, you are very perceptive. In my view, the “other forces” could be the repatriation of an estimated two trillions dollars that is sitting overseas to avoid high taxatio and a large amount of money that has been sitting on the sidelines which, according to one Fed estimate, is approximately $10 trillion.
More importantly, Obama’s departure will result in a wave of new optimism and economic activity.
Why are headlines pointing to Trump when it is an obvious ‘Bama bail in the markets?
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