The media is apparently surprised by the stock market rally in the aftermath of Trump's victory in the election on Tuesday, as they are apparently spectacularly ignorant people. Experts - hah!
Quote:
Trump rally enters Day 2; Dow hits new high
The Dow surged more than 160 points and blasted to new record highs after Asian markets soared overnight as Day 2 of the "Trump Bounce" gets underway as Wall Street fears related to Donald Trump’s stunning election win gives way to hopes that the president-elect's policies could boost the economy. Wall Street equities look to extend their winning streak to four sessions.
At 9:45 a.m. ET, the Dow Jones industrial average was up nearly 165 points higher, or 0.9%, making a new intraday high of 18,758.26 and eclipsing its closing record high of 18,636.05 notched in mid-August. The Dow jumped 256.95 points Wednesday to 18,589.69.
The post-election rally has been driven by investors reassessing their views on a Trump presidency and beginning to focus on the growth-friendly positives for the economy, such as fiscal spending, lower taxes and less regulation of businesses under Trump.
In general, Wall Street is shifting its focus from Trump, the man and presidential campaigner, to Trump's policies. Wall Street also is betting that Trump's growth-friendly policies have a better chance of getting enacted with Republicans controlling Congress, adds David Rosenberg, chief strategist at Gluskin Sheff.
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We saw the same thing in the lead-up to the Brexit referendum in the UK. The establishment pushed a scare agenda and predicted financial doom and devastation of the Leave side won. In the aftermath of the vote to leave, there was an immediate sharp dip in the market, as all the establishment experts sold off their positions that favored the Remain policy, and then the FTSE 100 set new highs within about a week after the vote.
No such delay here. The day after Trump's victory, the DOW came close to a new all-time high, and this morning it has hit a new intra-day all-time high. There was an overnight dip on Tuesday, as the "experts" bailed on their positions and adjusted their portfolios, but that did not even last a full 24 hours.
This is no surprise. Think about it. Donald Trump is a businessman, first and foremost. If he should be expected to achieve anything as president, shouldn't that be to pass policies that are friendly to business (and jobs)? And it is not just Trump, as the Republicans have always been a more pro-growth, pro-business party. Unnecessary and counterproductive regulations will be reduced, tax reform, especially corporate tax reform, is almost certainly going to be an early, high priority item.
Will it last? No, as there are too many problems in the world and the stock market goes up and down in response to them when they are impactful enough. The money printing policies of our Federal Reserve have apparently run their course and the Fed does not know how to extricate itself from this mess without tanking the stock market. The EU is probably the most likely source off a new global financial downturn, as they have enormous problems, even worse than our own. The Chinese are also having a certain level of difficulties. Etc.
So smoke if you got'em fellas. Enjoy the Trump rally while it lasts, because the ride down will certainly follow next. It always does.
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