Too Much Trump?
It would be fair to say that the stock market is obsessed with Mr. Trump right about now. Trump rally, Trump stimulus, make America great again, trade wars, currency manipulation, bringing the jobs back, earnings growth, economic recovery, market reaction, etc…
All empty words until put into action. For instance…..
“In my almost 43 years on Wall Street, I am not sure that I have ever seen so much consternation than at present. It is not just differences of opinion but it is a quite real fear of the unknown, I suppose. People just don’t know what they are getting into or where the country is heading. No surprise, I think, as tomorrow the Present will have a material break with the Past and the Future is a calculated guess.”
Perhaps we will see an immediate action within the economic spectrum, but I highly doubt that any of it will impact the stock market. Again, the US Economy is a massive tanker that will take years to turn around. Even if President Trump is successful in implementing positive changes, it would take years before the said changes show up in corporate earnings. Especially if you consider today’s massive imbalances ($20T in debt, zero interest rates, etc..) In the meantime, the market is pricing in perfection.
Instead, consider this…..
And there you go. At least history is telling not to expect much out of the market at this juncture. Throw in unprecedented valuation levels and the market just might surprise everyone. Particularly those who expect this sentiment driven rally to continue.
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