According to the stock market, Trump hasn’t put a foot wrong!
You might be forgiven for thinking that President Trump’s first month in office has been a little chaotic. Yet, between the million women marching on Washington to protest the new commander in chief, the unexpected resignation of Michael Flynn as national security adviser, and widespread concerns over the new administration’s honesty following press secretary Sean Spicer’s proffering of ‘alternative facts’, the stock market has risen dramatically. How dramatically? We’re now one month away from the best stock market since Lyndon Johnson’s 1960s run in The White House.
Prior to Trump’s election, some of the biggest names in the investment world were talking about contingency plans in the ‘worst case’ scenario of a Trump presidency. Democratic hopeful Hillary Clinton was seen as the ‘establishment candidate’: a friend of Wall Street with significant governmental experience. Trump, meanwhile, was seen as a dangerous outsider with radical views and little experience. Yet, the wild volatility expected by Trump’s naysayers has not yet come to pass.
George Schultz, founder of Schultze Asset Management, discussed the post-election mood with Bloomberg:
“It feels like I’ve woken up from a bad dream. Whether you like him or not, the guy has a pretty long track record of doing what he sets out to do. He’s a successful businessman and he’s got a plan that seems to be aggressive.”
The S&P 500 is currently up nearly 10% since Trump was elected, extending his forerunner’s bull market to its ninth year. The benchmark index for U.S. equities is an incredible 50% higher than its pre-2008 financial crisis – and 54% higher than its post-90s tech bubble record. This is pretty amazing, and it’s hard to claim that it’s not down to a new face in The White House.
Erik Davidson, chief investment officer at Wells Fargo, says:
“Up until recently, more than 90% of the questions that we got from clients were along the lines of ‘what can go wrong?’ Investors were afraid of their own shadows. Now, investors are more optimistic.”
With the best part of four years left under the current administration (at least!), long may that optimism continue!
The opinions in this article do not reflect those of Dominion Fund Management Limited, and in the instance of any forward-looking statements, these should not be construed as advice.
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