The liberal media warned that Trump’s election would cause a market crash, but it seems the opposite is happening.
Let’s take a look at Wednesday’s numbers:
• Record high for Dow (up 156 pts.)
• Record high for S&P 500 (up 0.8%)
• Record high for Nasdaq (up 0.99%)
• Global markets hit 19-month high
This activity comes following a set of executive orders from the Oval Office.
“Traders have been waiting for more details on infrastructure spending and now they have it in a very clear format,” says Think Market analyst Naeem Aslam. “There is nothing bigger than this. A break of 20,000 for the Dow stimulates fresh capital which has been waiting for this moment to join this party.”
“People are seeing that the administration is carrying through with some of the things they promised,” agrees John Stadtler of US Financial Services Industry Practice. “It looks like long-term capital gains are here to stay.”
Holding true to his campaign promises, Trump signed orders Tuesday that will make it easier for Energy Transfer Partners to finish the Dakota Access pipeline and for TransCanada to build the controversial Keystone XL pipeline.
On Wednesday, he signed a series of immigration-related orders that aim to streamline the deportation process, punish sanctuary cities for their lawless policies, and allocate funding for his promised border wall.
“Out of the gate, President Trump is moving along with his agenda,” says Terry Sandven of US Bank Wealth Management. “Earnings have been on the cusp of increasing, and that’s going to be key to hold these valuations.”
The US stock market has also gone up based on expectations that Trump will lower corporate taxes, increase infrastructure spending, and cut regulation. Mark Spellman of Alpine Funds points out that because “Trump has a majority of both houses” he can get things done quickly. “He can fast-track a lot of policies, which is typically not the case.”
The Dow is up more than 1,700 points since Trump’s victory over Hillary Clinton, with banks as some of the biggest winners: Morgan Stanley and JPMorgan Chase are up more than 20% and Goldman Sachs is up nearly 30%.
But some worry that Trump’s anti-globalization stance on trade deals will soon undermine the current market euphoria. Already, our new president has done away with the TPP and has promised to start renegotiating NAFTA.
“Is the market irrationally exuberant or will Trump prevail in a way that’s bullish for the economy?” asks Ed Yardeni of Yardeni Research. “The bottom line on Trump is: love him or hate him, you don’t want to bet against him.”
Author’s Note: Among all theses claims of “fake news,” I’d like to point out that Politico, the New York Times, CNBC, and Business Insider all predicted that a Trump “upset” would be bad news for the stock market. In this case we can accuse the accusers of spouting “fake news.”