Gasparino: Why the Trump Market Keeps Heading Up, Up, Up
By Charles Gasparino, The New York Post
The White House is in disarray, but the market isn’t scared. Indeed, the Dow is heading toward 22,000.
And for good reason: For all the Trumpian hysterics of the last six-plus months, the fact that Hillary Clinton isn’t president is good for stocks.
Of course, quantifying the Trump premium in the stock market is no easy task, and there are some sound fundamental reasons why we shouldn’t be surprised stocks are weathering the political chaos so well. Economic growth remains modest, inflation and interest rates are low, meaning bonds aren’t that attractive — all good for stocks. Meanwhile, corporate earnings appear stronger, and when companies make more money, stock prices go up to reflect the increased valuations.
But keep in mind, stock prices are also predictive — they tend to price in future economic growth and thus future earnings. So with little movement on tax cuts, at least so far, and health-care reform put off until God-knows-when (hence no repeal of the ObamaCare taxes), you’d think the Dow Jones would be correcting rather than rising.