Analysts are wary about the surge in stocks after Trump win. They warn that this upside can quickly stop if anyone or a number of events befell the wider world. Quincy Krosby of Prudential Financial says that the present market is willing to give the Trump administration the benefit of doubt, but the honeymoon period could be quickly over.
Slow market and disappointments
There are also the specters of sluggish earnings. This may come to the fore when companies will start to report their fourth quarter results during mid-January. A reality check could happen at that time. This view has been supported by Brett Reiner of Neuberger Berman Genesis Fund, who said that there is a possibility of disappointment when it came to fourth quarter results. The better side is that corporate earnings are looking god. The Standard & Poor ion third quarter ended its four consecutive quarter of declines in earnings per share. The latter are expected to go up by about 4.28 percent in fourth quarter.
Trump may well disappoint the market. The billionaire turned politician will face his maiden test in January when Donald Trump will be sworn in as President of the United States. Investors will expect Trump to keep his pre-election promise of deregulation, infrastructure spending and the much promised tax cuts. These policy hopes have pushed up both the small cap and large cap indexes to their record highs during recent few weeks. Analysts, however, give the new president some leeway, as details regarding new tax plans are yet to be known. Optimism rules as it is hoped that the new president will deliver as he has promised.
Momentum may stop
Stocks at present have an excellent momentum. They are going up higher in this period. Suffice to say, these are the best months for stocks in 2016. Concerns should be raised only if any event starts a turnaround in the investor sentiment. This could be catastrophic as investor confidence has jumped to many month highs. Analysts claim that Trump’s approach to grow the economy has a number of flaws. His use of Twitter as a negotiating tactic is not welcomed in the real world of tough governance. The use of social media in presidential work will not result in the growth of confidence. The President-Elect has repeatedly taken utilized Twitter to attack American companies like Lockheed Martin to take a hard approach on relations with the Chinese mainland government.