Donald Trump isn't the only reason - or even the main one - why stock markets are booming in America and beyond
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Version 0 of 1. Is Donald Trump right to claim that since he became president there have been 84 stock market records smashed, and, indeed, that that very fact is also a stock market record? He said so in his ITV interview with Piers Morgan. He has made such claims many times in the recent past; they, with some encouraging figures on unemployment, are the routine answer to virtually any criticism (including his record on race – “record low black unemployment” – and women – “all time low unemployment rate”). For Mr Trump, the stock market = the economy. Although there is no official list of these various stock market records, let’s not go so far as to dismiss the claim as necessarily “fake news”. It’s the sort of number that looks perfectly plausible from a quick glance at the graphs. And just look at those graphs, as Mr Trump would say – those big, beautiful graphs. The “Trump Effect”, the “Trump Jump”, the “Trump Rally” – whatever you wish to label it, it is real enough; the S&P 500 is up 26 per cent since Inauguration Day, January 20th 2017, with the Dow Jones and Nasdaq powering ahead by 34 per cent and 35 per cent respectively. Let’s call it 30 per cent since Trump came to power, adding trillions of the value of American corporations, large and small. So it is certainly the case that the three main US share indices have displayed impressive strength in the months since Mr Trump took over. But how much of it is down to Mr Trump and his policies? Here are a few observations; The Donald has been good for investors and the stock market. The Trump Effect is real – but maybe not quite as impressive as its “author” somehow claims. Economic life tends not to be as simply as the world according to Donald Trump. He can take due credit for some of the rise – which means many billions if not trillions on the overall national wealth of the US and even the world – but by no means for the lot. Companies investing, consumers buying goods and services, and central banks and other governments pumping demand into the world economy at the same time over the past decade has been fuelling the motor of growth, long before Mr Trump got into the American driving seat. One last point. What, I wonder, will Mr Trump say if and when stock markets start to set records on the way down? If his friends in Wall Street dump us in a Depression? He won’t be able to blame Obama or Hillary. Will he? |