Opinion: The economic data will doom the Trump stock-market rally

Market Watch ^ | Dec 19, 2016 12:06 p.m. ET | Tim Mullaney

[expat_panama]

Economic growth has slowed since the election. What will happen to housing under President Trump?

Funny thing about the rally in U.S. stocks since the Nov. 8 election that has the Dow Jones Industrial Average DJIA, +0.20% approaching 20,000: The underpinning of optimism about a pickup in the U.S. economy it has been based on is slipping away.

Heh, heh, heh.

Faster than Republicans learn to love Russian espionage when their party’s presidential nominee is the intended beneficiary, fourth-quarter economic data are heading south. The Atlanta Federal Reserve Bank’s influential GDPNow forecasting tool, which predicted 3.1% annualized fourth-quarter growth on Election Day and rose to 3.6% as more October data rolled in, is now predicting 2.6% growth. The New York Fed’s NowCast puts fourth-quarter growth at 1.7%, and the first quarter of 2018 at 1.8%, about half the third quarter’s 3.2% pace, thanks to bad data last week on November housing starts and industrial production...

...almost as if someone thought the election meant a new president might raise mortgage rates with inflationary fiscal policy and limit industrial exports by starting trade wars with Mexico or China, then began building fewer houses and making less stuff, since a quarter of U.S. manufactured goods are exported...

...The bull-market case is that prosperity means a few tenths of a point of extra near-term growth... ...Plus, doing a massive, deficit-exploding corporate tax cut Goldman says will be spent mostly on stock buybacks. All the while sticking it to exporters and hospitals through trade and health-care policy.

It’s a bet that corruption spurs growth, in other words. And that growth isn’t even happening as heralded. How much do you really want to bet on that?

[MortMan]

In other words, if Trump tries to manipulate the economy like a politician, he will fail. If he lightens the regulatory and confiscatory load stacked against businesses, he might succeed.

Most of these analyses assume he will be a politician.

[babble-on]

Economic data does not guide the stock market in the way the author of this piece appears to believe.

[Lazamataz]

Wow. The ButtHurt is strong in this one.

[StAnDeliver]

Chemobrain’s twitter Tim-eline shows he posted it a day ago. Not one single retweet or like.

[Caipirabob]

Part of the economic formula is pure faith. If Trump carries out what he said he will, then that faith will grow as will the economy. I believe it will grow and that Trump is dealing with a great lot of mostly mental midgets in comparison to his abilities.

[SoFloFreeper]

Hussein seized power 8 years ago.

Not a SINGLE YEAR has had a GDP of 3%. Not one.

[expat_panama]

A very happy Tuesday morning everyone!  Our 'uptrend' is "still intact" as yesterday's stocks closed up a tad in lower volume.  Translation: we're still going nowhere as we have for months and that's better than going broke --and that's also better than our gold and silver now falling to $1,133.90 and $15.92!   Metals futures are still edgy down a half % in contrast to their +0.13% outlook on stocks.

No econ reports.

News:

Few Saw '16 Coming, Least of All Wall Street - Kevin Dugan, New York Post
What Should Worry Investors Heading Into '17 - Anthony Mirhaydari, TFT
Market Experts Could Cost You Dearly in 17 - Shawn Langlois,MarketWatch
The Markets Reflect Asset Re-Pricing Worth Trillions - Daniel Gross, S+B
The Market Looks Awfully Expensive Since Trump Rally - Neil Irwin, NYT
How Trump Has Changed 2017 Financial Outlook - Mark Whitehouse, BV
It's Not Mexico That Will 'Steal' the Carrier Jobs - Allan Golombek, RCM
Obamacare Repeal Isn't For the Rich - David Catron, American Spectator
Kudlow Is Too Loyal to Supply Side - Jonathan Chait, New York Magazine
CEA Lowlights Speak to Kudlow's Importance - Brian Domitrovic, Forbes

[lulu16]

“The underpinning of optimism about a pickup in the U.S. economy it has been based on is slipping away.

Heh, heh, heh.”

Why is this jerk laughing?

And...

“It’s a bet that corruption spurs growth, in other words. And that growth isn’t even happening as heralded.”

What a smarmy writer.

[exDemMom]

For the first year after the election of a new president, the economy is still rolling (or sputtering) along under the old president’s policies. Trump has not even been inaugurated yet.

Wait until FY18—that is when we will really start to see the Trump economy.

[PGalt]

FEDDOOM?

HOORAY Mr. Donald J. Trump

[wbarmy]

This A*****E is laughing that the economy will be really bad when Trump takes the reins of government and that America deserves it for electing Trump. Plus it is somehow Trump’s fault that the economy will be bad, even though it was glorious under Obama.

Somebody please fire the America hating piece of offal.

[Lion Den Dan]

This is the third market based article from financial rags that I have read this morning. They all read like some 1970s Communist propaganda. What gives?

[Vision]

Faster than Republicans learn to love Russian espionage when their party’s presidential nominee is the intended beneficiary

Stopped reading there. Idiot.

[GailA]

FAKE NEWS

Seiverville, TN has a tremendous need of builders as thousands of homes and business were destroyed in the wild fire.

U E 6
http://www.macrotrends.net/1377/u6-unemployment-rate

The real bad news is buttercup LIBTARDS are going to be out of work when President Trump cleans house of useless VA, Military, and other government agencies and muzzies in our government. Keep making those list of Libtard teachers and Profs and any other of their ilk we can eliminate.

And hires competent workers.

[rb22982]

Does this moron really think people changed their behavior negatively based on the election and is hurting GDP? More likely 3Q results - like most of the last 8 years - was just the anomaly. After all - every key metric that matters (consumer optimism, CFO optimism, small business optimism, investor optimism, etc) all skyrocketed post election.

If this buffoon is right, you should pile into bonds as they will revert close to their pre-election levels.

[theBuckwheat]

Austrian economic theory shows that the main cause of the “boom-bust” economic cycle is rooted in government suppression of the free market price of the time value of money. In other words, when government forces interest rates to nearly zero (or below) by creating massive amounts of money (in the form of debt), it causes long term distortions in how that money is used.

When those investments fail to provide a positive return, the cost of the debt must still be paid. That puts a double burden on the parts of the economy that are still profitable. That is when we have a “recession”. The Austrians would say that massive money creation causes a mirage. The new money coming to the economy creates the illusion of prosperity. When the flow of additional money stops, the prosperity dims out and people pull back from their spending plans. This “bust” is backed into the cake and is eventual even as it may come several years later in the cycle.

Because of the massive amounts of money-creation by the four major central banks (China, Europe, Japan, US), the next recession will be synchronized and it will be significant. Just at Reagan had a recession to deal with, the next recession will fall on Trump, and he will be blamed for it even though he had nothing to do with it. We can count on the media to pound the drums loudly when the Trump Recession arrives.

[bert]

Gloom, despair, and agony on me
Deep, dark depression, excessive misery
If it weren’t for bad luck, I’d have no luck at all
Gloom, despair, and agony on me

[buckalfa]

Trump will not act as a traditional politician, however the Congress will. The stock surge is based on optimism over what Trump proposes, not market fundamentals. The question is will Congress pass the Trump agenda? If not, all bets are off.

[antidisestablishment]

I the spineless GOP congress continues their tradition of cowardice, Trump ‘s agenda will steamroll them. The gods of PC have fallen, and the politics of shame are over. Given his masterful annihilation of the opposition press, the lily-livered GOP political hacks don’t stand a chance. Their hackneyed loyal opposition playbook is as obsolete as bows and arrows in a nuclear war.