Advertise | Bookmark | Contact Us | E-Mail List |  | Update Page | UraniumSeek.com 

Commentary : Gold Review : Markets : News Wire : Quotes : Silver : Stocks - Main Page 

 GoldSeek.com >> News >> Story  Disclaimer 
 
Latest Headlines

Gold Seeker Closing Report: Gold and Silver Gain About 1%
By: Chris Mullen, Gold Seeker Report

Northern Vertex Files Preliminary Economic Assessment Report for the Moss Gold Mine in NW Arizona
By: Northern Vertex Mining Corp.

Does The CoT Structure Prohibit A Rally?
By: Craig Hemke

Harry Dentís Gold Prediction Invalidated
By: Przemyslaw Radomski, CFA

SELLING OUT OF PRECIOUS METALS AND BUYING BITCOINÖ. Very Bad Idea
By: Steve St. Angelo

The Bitcoin Bubble Explained in 4 Charts
By: Jake Weber

VXX Sends an Awesome Message from Another Galaxy
By: Rick Ackerman

Geopolitical Risk Highest ďIn Four DecadesĒ Ė Gold Demand in Germany and Globally to Remain Robust
By: GoldCore

Asian Metals Market Update: November-22-2017
By: Chintan Karnani, Insignia Consultants

Gold Seeker Closing Report: Gold and Silver Gain With Stocks
By: Chris Mullen, Gold Seeker Report

 
Search

GoldSeek Web

 
Could Trumpís economic Policies Propel Hated Stock Market Bull even Higher


 -- Published: Monday, 27 February 2017 | Print  | Disqus 

By Sol Palha

I add this, that rational ability without education has more often raised a man to glory and virtue, than education without natural ability.  Marcus T. Cicero

Before we get into the meat of this article, we would like to state at the onset that this article is not politically orientated.  This election has probably been more divisive than any other election in U.S history. There are those who love Trump and those who detest him. Our views are based on market trends and not politics. Before the election results came in, we went on record to state that a Trump win would from an investing perspective prove to be a great buying opportunity and the masses would panic and dump their shares. We took the same stance on Brexit, and as they say, the rest is history.

From a contrarian angle (and not a political point of view) a Trump win could be construed as a positive development; non-contrarians will demand to know why? Mass Psychology clearly states that the masses are always on the wrong side of the equation.  A Trump win will create uncertainty, and the lemmings will flee for the exits; markets will pull back sharply and viola the same old cycle will come into play.  The cycle of selling based on fear which equates to opportunity for those who refuse to allow their emotions to do the talking. Tactical Investor

Trumpís agenda is in some aspects strikingly similar to that of Ronald Reganís who was known for his pro-growth policies.  When Regan took office, unemployment was in the 7.5% ranges by the time he left office it had dropped down to 5.4%. GDP growth surged and averaged 3.8% per year.  Inflation was brought down to 3.7% and averaged 4.4% during his eight-year reign. 

Reganís massive tax cuts contributed to exponential growth. He cut taxes from 70% to 28% for the top income tax rate, and reduced corporate taxes from 48% to 34%.  This is what probably helped drive the SPX 400% higher over the past 30 years, and these policies continue to drive the market higher.  Trump is seeking to lower corporate taxes from 35% to 15% and has aspirations to reduce taxes for the average American. He also wants to embark on a massive infrastructure restoration plan, which if implemented should create thousands upon thousand of jobs.

Traits that Trump shares with Regan

         Both were outsiders

         Both were TV personalities; the only difference being that Trump is both a television personality and a businessman

         Both were ridiculed by the press and were mostly written off from having any chance at a win

         They both made promises to make America great

So how is Trumpís economy faring?

Well, by looking at the stock market, the outlook appears to be pretty good.  The Dow has had Ten winning days in a row and is now up roughly 5% for the year.  The markets are forward looking beasts so they appear to be viewing Trumpís economic agenda through a bullish lens. However,  everyone is getting excited over this market, which might not be such a good thing in the short term, but that is a story for another day.

Corporations and Wall Street are drooling over the prospect of less regulation and lower taxes and judging by Trumpís recent actions; he looks set to deliver on many of his campaign promises.  There is a massive pile of money sitting overseas that corporations would repatriate in a heartbeat under the right conditions.  Some estimates put the amount of cash sitting overseas at $2.5 trillion. Trump could soon provide them with that opportunity, and this money among many other things could be used to fund massive share buybacks which will only help propel these stocks higher.  Among the biggest benefactors from a lower corporate tax rate would be GE, AAPL, and MSFT.

Under Regan the stock market soared, unemployment levels dropped, and GDP growth rates rose significantly. If Trump takes a similar path, then the outlook for the stock market going forward could be quite favourable.  However, one should always defer to Mass Psychology; if the crowd turns euphoric than caution is warranted. The time to jump in head first was in Nov of 2015, Jan of 2016 and before Trump won the elections.   As the trend is still up, sharp pullbacks have to viewed through a bullish lens. The crowd is not euphoric, but the markets are extremely overbought, so prudence is justified over the short term. Investors should consider waiting for the market to let out a nice dose of steam before jumping in.

A genius can't be forced; nor can you make an ape an alderman.

Thomas Somerville


| Digg This Article
 -- Published: Monday, 27 February 2017 | E-Mail  | Print  | Source: GoldSeek.com

comments powered by Disqus



 



Increase Text SizeDecrease Text SizeE-mail Link of Current PagePrinter Friendly PageReturn to GoldSeek.com

 news.goldseek.com >> Story

E-mail Page  | Print  | Disclaimer 


© 1995 - 2017



GoldSeek.com Supports Kiva.org

© GoldSeek.com, Gold Seek LLC

The content on this site is protected by U.S. and international copyright laws and is the property of GoldSeek.com and/or the providers of the content under license. By "content" we mean any information, mode of expression, or other materials and services found on GoldSeek.com. This includes editorials, news, our writings, graphics, and any and all other features found on the site. Please contact us for any further information.

Live GoldSeek Visitor Map | Disclaimer

The views contained here may not represent the views of GoldSeek.com, its affiliates or advertisers. GoldSeek.com makes no representation, warranty or guarantee as to the accuracy or completeness of the information (including news, editorials, prices, statistics, analyses and the like) provided through its service. Any copying, reproduction and/or redistribution of any of the documents, data, content or materials contained on or within this website, without the express written consent of GoldSeek.com, is strictly prohibited. In no event shall GoldSeek.com or its affiliates be liable to any person for any decision made or action taken in reliance upon the information provided herein.