On Friday, the S&P 500 closed at a new record and President Trump was quick to share his comments about the same with the reporters. According to him, it was because of ‘him’ that the American stock market was doing so well. He added that he had always been very good with money and jobs.
High-performing U.S. Stock Market
This is not the only time Trump has taken credit for the stock market performance. The U.S. stocks have increased by over 20% in the last year. Fiscal stimulus and tax reforms have helped boost American shares in the light of Trump’s win. However, there has been constant doubt whether the Republicans would manage to accomplish their administrative agenda.
The S&P 500 Index profits will reach a total of $129.40 per share this year, report analysts, after compiling data from several thousand individual companies. The same figure will stand at $145.70 per share in the coming year. Four days prior to the presidential elections, the projections were almost the same.
Hence, if you think that earnings are the driving force behind share prices, there is not enough proof to suggest that Trump has contributed to improving the base of the market. But the President may argue that he hasn’t done anything that would hinder the previous year’s estimates from being accomplished. This is perhaps his only victory and contribution.
White House policy is ‘No Change’
According to the CIO of Harvest Global Investments Ltd (Hong Kong), Thomas Kwan, the corporate earnings of the United States in 2017 have either been met or have exceeded expectations. And it might be the overall macro recovery across the globe which has helped push up all equity markets, including the U.S. He added that as far as the White House is concerned, they would either remain inactive or introduce a minor tax cut. However, there is unlikely to be any policy-related change or impact on the American economy and the markets.
There have been times when changes in the White House have impacted America as well as the international stock market in 2017. For instance, the failure of Trump’s health care reform had led to the market following the fortunes. This was understood as the President’s inability to implement key proposals, like tax cuts. Controversies like investigations around the Russian interference in the U.S. presidential elections also ended up weakening the expectations for favorable market policies.