Stock Market Rises As Trump’s Prospects Fall

If this trend persists, President Trump’s White House stay will be bookended by optimistic stock markets accompanying his arrival and his departure.

 

President Trump campaigned vigorously in 2015/2016, promising, among other things, to bring back former leading U.S. industries, then stagnant: Steel, aluminum, oil & gas and coal. However, he failed, and those groups are dramatically lower, even though the overall stock market rose.

 

Now, however, those stocks are joining today’s rising market because of Trump, but not for the reasons Trump anticipated. This time, it’s his potential leaving that is creating bullishness.

 

Following Congress' 2017 year-end tax bill that included reduced corporate taxes, Trump began to act to support his favored industries. He unilaterally (that is, without advisory input or support from Congress) enacted "emergency" tariffs and signed Executive Orders (many reversing established measures and procedures). And he made his intentions clear by engaging in anti-world (particularly anti-China) trade rhetoric.

 

However, except for brief bouts of optimism, those pet industries have performed terribly as Trump’s hoped-for benefits failed to materialize. Worse, trading partners enacted measures that put U.S. businesses at a disadvantage.

 

If Trump's reign as President is ending, his time in office may be bookended with stock market rises. Four years ago, Trump's surprise win caused the market to run up. Today, it looks like the market is running up in anticipation of Trump's defeat.

 

If he does lose, optimism could rise further, both here and abroad. In fact, his legacy may be that, in the end, he brought people together at an especially important time.