Trump and Black Friday. Two things you probably would never think I would use in the same sentence. The "Trump Bump" or, the postive turn the market and ultimately consumer spending is taking may have something to do with the election. I stand corrected. In October I was on with Neil Cavuto talking about how Donald Trump would be a disaster for the markets because he isn't a "proven" leader. Here are my notes from the segment:
WHAT WILL HAPPEN TO STOCKS IF TRUMP IS ELECTED: BAD THINGS
Unknown politician. Not proven. Uncertainty makes markets more volatile.
The uncertainty would make the Federal Reserve more likely to keep U.S interest rates low for longer, and the dollar would fall further against other major currencies
What he has promised: to overturn 35 years of U.S. economic consensus and to roll back free trade agreements, restrict imports, and manipulate the U.S. dollar. He has also promised massive tax cuts and spending hikes.
His first orders of action will hit the US right at its economic core:
US annual trade with China, Mexico, Japan and South Korea — the four overseas partners that a President Trump would be most likely to target — totaled $1.7 trillion last year. That’s equal to nearly 10% of the entire U.S. economy, and about $14,000 PER HOUSEHOLD.
Reasons why we should be worried:
The state of the US Economy: Not as strong as we think it is.
Stock market is 3% away from Sept’s all time high- stocks are expensive the market is due for a correction despite the election.
Bond uncertainty
Commodities: A Brexit like impact:
Trump’s protectionism policies on the global economy would hurt prices for industrial commodities
undermine the prices of assets that are perceived to be riskier also have an impact on equities and emerging-market currencies.
Only safe haven: GOLD.
At the time, European markets were reeling and Trump's tweeting didn't seem helpful. At the first sign he was going to win the presidency, the Dow futures dropped 800 points. BUT, shortly thereafter (and when I mean shortly I mean within minutes of the market opening post election, the unthinkable happened: the markets rebounded and they have been on an upward trajectory ever since. While most of us in New York are balking at this untraditional president elect, the rest of the country is feeling hopeful. Here is a guy that may acutally save jobs, create wealth and bring back wage growth to stagnant industries. Hope translates into confidence, and ultimately spending. Are we out of the woods aka economic trough yet? Not really. I discuss why on Your World w/ Neil Cavuto last week. Check it out: