The American economy continues to mark record growth almost one year after the election of President Trump, despite doomsayers suggesting his election could crash the stock market.
“Since Election Day on November 8, the Stock Market is up more than 25%, unemployment is at a 17 year low & companies are coming back to U.S.” President Trump tweeted early this morning in response to favorable reports from Wall Street.
“The U.S. has gained more than 5.2 trillion dollars in Stock Market Value since Election Day! Also, record business enthusiasm,” the president said in a follow-up tweet.
By “Stock Market” President Trump is likely referring to the Dow Jones Industrial Average, the Nasdaq composite, and the Standard and Poor 500 (S&P 500) that measure the value of a cross-section of the market. All three stock market indexes hit record highs early this morning.
CNBC is reporting that the Dow Jones gained 46 points, Nasdaq Composite rose over 0.1 percent and the S&P 500 increased .08 percent, as of Monday afternoon, and the numbers are continuing to rise. These increases are attributed to strong performances in the telecommunications and energy sectors. All three indexes have seen a 17 percent increase this year alone.
The stock market is buzzing as companies prepare to report their third-quarter earnings. All eyes are on Netflix, who is expected to release their earnings report after the stock market closes this evening.
“This week is important because you’ve got companies from almost each sector reporting, so you’re going to get a good picture” of America’s economic health, explained Quincy Krosby, the chief market strategist at Prudential Financial.
Bruce Bittles, the chief investment strategist at Baird, explained that the growth in the market is spurred by legislation promised by President Trump.
“The support for the market is centered on improving economic conditions worldwide and on growing expectations for tax relief,” he said. “From a flow of funds perspective, tax reform is expected to allow for the return of overseas profits estimated at being more than $2 trillion. The money from overseas could provide capital for stock buybacks,” added Bittles.
The Senate is expected to act on the $4.1 trillion budget passed by the House of Representatives earlier this month. The Senate is scheduled to vote on the budget this week, and Republicans are hoping that the budget will pass quickly so they can shift their attention to President Trump’s promised overhaul of the tax system.
The stock market is up and the unemployment rate is down under President Trump. Do you think he’s doing a good job?
President Trump’s tweet, almost a year after his election, stands in sharp contrast to the market doom and gloom predicted if he won the White House. In a CNBC report released days before the 2016 election, economists warned that a Trump victory could send the stock market into a tailspin.
Last November, Eric Zitzewitz, a professor of economics at Dartmouth College, told CNBC that, “if [Hillary] Clinton wins [the market] should be up about 3 percent and if Trump wins, it should go down 7 percent.”
Looking back with the power of hindsight, one year after the original prediction was made, a Donald Trump victory has led to a 25 percent uptick in stock market performance since November 8, 2016. Marking a more than 22 percent increase in stock market performance than what was expected if former Secretary of State Hillary Clinton won the White House.