Why Don’t Stock Markets Care about Donald Trump?

Despite a revolving door at the White House, unsuccessful policies and a controversial commununications strategy, Donald Trump is presiding over a rising stock market

Cherry Reynard 18 August, 2017 | 10:32AM
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Donald Trump

Donald Trump has been an unpredictable presence in the White House. From rhetoric on trade, to agitating in North Korea, President Trump has seemed to be an unstable hand on the tiller. But markets don’t seem to care. The S&P 500 continues to tick higher. This is in notable contrast to the political discount afforded, until recently, to the Eurozone, and, currently, to the UK. Why doesn’t Trump matter to markets?

The Trump Bump

Stock markets soared when Trump was elected in November last year. The S&P 500 climbed 5% as investors took Trump at his word, believing that he would deliver tax cuts, higher infrastructure spending and economic growth of 4%. This momentum has undoubtedly slowed as investors have realised that President Trump is unlikely to be able to deliver on many of these promises, but US markets continue to climb higher and, until the past few days, had continued to hit new highs.

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Securities Mentioned in Article

Security NamePriceChange (%)Morningstar
Rating
Alphabet Inc Class C2,856.12 USD0.00Rating
Coca-Cola Co53.73 USD0.00Rating
Ford Motor Co19.75 USD0.00Rating
Microsoft Corp329.68 USD0.00Rating

About Author

Cherry Reynard

Cherry Reynard  is a financial journalist writing for Morningstar.co.uk.