Dow, S&P 500, NASDAQ and Russell 2000 have achieved the highest new levels ever.
Investors revolve in excitement and clearly believe that both major multinationals and smaller companies that do their business in the United States will continue to prosper.
Is this the Rally of Donald Trump? Or Janet Rally Yellen?
Some strategists believe that Trump motivating and talking about killing many exhausting regulations are the reasons for high stocks.
Or may this be better described as a continuation of Mars Barack Obama instead?
You can say that Potus 44 has dealt with Potus 45 very good hand.
Trump’s powerful labor market and the general economy inherited by Trump may be the reason why consumers and companies are very confident.
But investors (financial journalists) often give the president more credit – and their blame – may deserve to pay the stock market.
Jonathan Gulop, RBC expert, referred to this in Monday’s report, titled “A Message to the Market: It is not a matter of Donald.”
Related: Trump does not kill the bull market
Golub noted that the S&P 500 increased by almost 7 % from late June to election day – a time when most opinion polls expected Hillary Clinton to be the next president.
But the shares have continued to gather since then, as they increased by another 8 % since Trump came out of the victory (at least to the main media Wall Street).
You cannot get it in both directions. It is not logical to suggest that the stocks have risen because investors believe that Trump will lose and that they continued to gather because Trump did not lose.
The bond returns have also increased since Trump’s victory, a phenomenon attributed by many investors to the possibility of stimulation from the president and the Republican Congress.
However, Golub notes that the 10 -year -old US cabinet was rising during late summer.
Of course, many investors expected to stimulate from Clinton as well.
However, again, many investors claim that Trump is the catalyst for something not only happened before his election, but it was happening because many thought he would lose.
Related: The stocks avoided 1 % diving for an extended period of time
So it is strange that Trump is being martyred as a major reason for the market gathering, which started months before anyone feeling that he could win.
What really happens? One fixed during the past few months is the federal reserve.
Yes. The markets interact with Washington. But they take care of the most close interest of the Janet Yellen, not the White House.
The federal reserve explained before the elections that it is possible that interest rates in December and do so several times in 2017, regardless of who won the race for the presidency.
The good news for investors is that the American economy seems to be steadily growing, but it does not seem to be at risk of high temperature.
Related: This is the reason why the world’s largest director is concerned
The latest job report showed that wages grew at a decent rate of 2.5 % annually. But this is not high enough to raise fears of fleeing inflation and federal reserve raises rates.
Even if the height rates in Yellen and Fed are three times this year, they are likely to do so by only a quarter of a point at a time. This would push the average Federal Reserve in the short term to 1.25 % to 1.5 %.
This is still very low. At those levels, stocks will remain more attractive than bonds. Companies profits should be able to continue to rise in a healthy clip. Consumers may continue to spend.
Therefore, investors will be wise in close monitoring on Yellain and not just focusing myopia on the president,
Take into consideration, Yellain is scheduled to witness in front of Congress on Tuesday and Wednesday. What you say about the timing and size of the high interest rates in the future can end up to keep the gathering to move forward in the foreground – or prevent him from his death in his paths.
CNNMoney (New York) It was first published on February 13, 2017: 12:30 pm East time