A year ago the stock market via the Dow Jones Industrials DJIA had dropped 700 points on the news that Trump had won.
Reporter to Babe Ruth – Babe did you know you are earning more than the President of the United States?
Babe – Well, I had a better year than the President!
President Trump had a better year than the media has reported. Let’s take a look.
A year ago the stock market via the Dow Jones Industrials DJIA had dropped 700 points on the news that Trump had won. It was a great buying opportunity. Today it stands at 24,644, an increase of 33% in just one year. I am not finding a total market capitalization for the DJIA but there is no question this has created a tremendous wealth effect. Jaguar, Maserati, and even Bentley have all added SUVs which are selling well thanks very much.
The US has experienced its third straight quarter of domestic growth, now pegged at over 3% annual. The last administration had given up on ever seeing the 3% number while denying its policies were holding things back. And that policy would be excessive regulation. The Federal Register had grown to some 95,894 pages, the highest ever. That dwarfed the previous year total of 80,260. The Register page count is down 32% this year.
Demand for college educated accountants soared, for all the wrong reasons. The accountants were not hired to increase productivity but to comply with ever more burdensome regulations. Cash that might have been used for product creation was instead spent on compliance. It is no accident that we have seen the more automation and robotics as hiring an employee became more and more expensive.
Business is coming back to America. The promise of a corporate tax decrease from 35% to 20-22% should be energizing. With some three trillion dollars sitting idle over seas, surely the stock market is expecting big things. Just this week President Trump featured multiple families describing how the tax program would help them.
But there is downside as well. Liberal critics are still literally unhinged. At least four news reports were deemed fake and were retraced this past week. The death of civility is upon us. Democrats refuse to engage in policy debate only saying the tax cuts are ‘for the rich’ and anyone not believing that is a racist. This is hardly the robust debate forum the Senate used to be.
Trump’s thin skinned tweets have created at least three groups if not four. The first would be his supporters. He claims the tweets energize this group. But that theory fell apart in recent Virginia and Alabama elections. The next group includes Republicans who still are stunned that an outside independent won the nomination and the election. This would include the Lindsey Graham / John McCain wing of the party. And I read they are weary of defending his tweets. The third group is led by Chuck Schumer and Nancy Pelosi, elected Democrats opposing everything Trump. This would also include the major media. And finally the fourth group would be the Bernie Sanders/Elizabeth Warren LSL, Literal Socialist Left.
The schoolyard insults between Kristen Gillibrand (Trump must resign!) and President Trump’s reply (she’s a lightweight) have only helped her raise campaign cash. Drop the tweets and speak from the Oval Office or the Rose Garden. Just yesterday talk show host Mike Gallagher was urging Trump to adopt a gentler style as he did with Doug Jones in his Alabama victory.
Japan has just inked a big trade deal with Europe. Trump’s idea of country by country trade deals make little sense in an ever increasing global economy. Why he cannot be as friendly with Mexico as he is with England is a mystery to me.
But for the time being the Trump Stock Market Rally continues.
Follow Dennis Elam at http://www.themarketperspective.com.