Why the Trump-inspired rally in US stocks is fragile

Michael Collins

US stocks have surged to record highs since Donald Trump won the US presidential election. To justify these unprecedented levels, investors are making many assumptions on how the Trump era might manifest itself across politics, economics and ultimately returns. These assumptions include that Trump will prove more moderate in power than on the campaign. Another expectation is that fiscal policy will play a bigger role in driving the US economy, which will lead to faster inflation and higher interest rates. Investors are assuming that Trump will adopt a more protectionist approach to trade but only in token ways so it doesn’t sabotage the US economy. They are confident he will refrain from any taunting of the Federal Reserve that crimps its independence. But these central scenarios appear to be on flimsier footings than many might think. Thus 2017 could prove more turbulent for US stocks than many assume. (VIEW LINK)


Michael Collins
Michael Collins
Investment Commentator

Highly respected investment writer and media manager with more than 16 years experience in investment management.

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