Stock Market Growth Continues Under ‘Trump Trade’

U.S. stock markets continue to rally this week amid optimism around President Trump’s economic plans. Reaching a historic high on Monday, S&P 500 topped $20 trillion. This latest rally is a part of the ongoing boost stock market indices have been enjoying as economists wait for the Trump Administration to roll out its economic plan.
Despite a slight stall last week, the stock market has a renewed optimism, with financial and industrial stocks benefiting most from the ‘Trump trade’.
Despite stock market optimism from Wall Street, economists remain wary of the President’s economic plan. According to a Reuters report, some experts are starting to express concern over when he will actually introduce his plan.

What’s Helping Stock Market Growth

Of the two stock market indices that are performing highest under the ‘Trump trade’, financials and industrials, this is due to the two consistently repeated points of rhetoric that Trump has been using since his election:

  • Widespread banking deregulation
  • Increased infrastructure spending

With his promise of deregulating U.S. banking practices, financial stocks are soaring on optimism for lax regulation. President Trump has made it clear that a major revisitation of Dodd-Frank is necessary. Established in 2010, Dodd-Frank is the main legislative force for banking regulation.
President Trump has also consistently referred to his plan to increase infrastructure spending, to the boon of industrial stocks post-election. The Trump Administration has made clear it’s intent to promote and encourage U.S. manufacturing, hoping to kick-start another industrial boom.

Uncertain Future for Stock Market?

Despite the dominating conditions, experts remain skeptical. There are several factors that hinder future stock market growth or cause a reversal:

  • Yet-to-be-seen economic plan
  • Global economic factors

Experts have expressed concern that despite the promises and optimism, this has yet to translate to an actual economic plan. U.S. markets are also tied in heavily with the global economy. It is unclear whether a separation from that may affect the stock market negatively.

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