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Trumponomics

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  • Jan 27th, 2018 7:30 pm
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[OP]
Deal Expert
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Dec 7, 2012
32228 posts
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GTHA

Trumponomics

It has been six months since US President Donald Trump took office.

Amid a slow and disorderly White House transition - including a string of high profile departures - and an ongoing investigation into his Russia ties, Trump is trying to divert the world's attention onto the US economy.

The Dow Jones Industrial Average hit the 22,000 mark for the first time in its 121-year history. Stocks headed higher even as Wall Street lost confidence that Trump's election proposals like tax cuts and infrastructure spending will be pushed through Congress.

There's expectations of a loosening of Wall Street rules put in place after the financial crisis, which has given a boost to financial stocks like Goldman Sachs. The second quarter earnings season has also been largely better than expected.

The US Commerce Department estimates the economy grew at a 2.6 percent annual rate in the April-June period.

But Trump's tax cuts are months behind schedule. The failure of healthcare reform raises questions about his ability to get a budget passed. And there's also a great deal of uncertainty about his trade policies.

So what's the state of US economy and what's Trump's got to do with it?

16 replies
Deal Addict
Oct 6, 2015
2463 posts
1396 upvotes
It appears to be in a big tech bubble, just like George W Bush inherited when he came into office. Bush was smart enough not to take credit for it. I've read an article that 10% of the market is responsible for 40% of the gains, and that 10% of the market is mostly the big brand-name tech companies. FB, AMZN, GOOG, etc. with completely disproportionate market capitalizations.

The best thing to buy in the early 2000s was gold stocks. If you bought at the bottom, within a decade, based on the ^HUI index (gold BUGS index), one had grown their money by 14X.
Deal Fanatic
Jul 1, 2007
8547 posts
1724 upvotes
The U.S. (and global) economy is doing well despite Trump, not because of him.
Money Smarts Blog wrote: I agree with the previous posters, especially Thalo. {And} Thalo's advice is spot on.
Sr. Member
Feb 17, 2012
657 posts
129 upvotes
Toronto
Thalo wrote: The U.S. (and global) economy is doing well despite Trump, not because of him.
In a lot of cases it is because of him. He mentions a company and the shares fly.

On a side note. Trudeau and Trump have a lot in common actually. Both have done absolutely NOTHING since entering office!
Newbie
Jun 28, 2017
85 posts
29 upvotes
That's not entirely true. Trump has tweeted a lot while Trudeau has been truly busy, getting his picture taken at every opportunity.
Deal Fanatic
Jul 1, 2007
8547 posts
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I know they prefer no political posts there, but can I just say that all political leaders are terrible?
Money Smarts Blog wrote: I agree with the previous posters, especially Thalo. {And} Thalo's advice is spot on.
Deal Addict
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Jan 14, 2009
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Vancouver, BC
Thalo wrote: I know they prefer no political posts there, but can I just say that all political leaders are terrible?
True! But to be more precise, all governments are terrible because they are corrupt and inefficient!

Potential good Trump things for the market Smiling Face With Sunglasses: deregulation, less taxes, cut government spending

Potential bad Trump things for the market :facepalm: : restrict/decrease trade and movement of capital
If you buy vgro for a thousand years Vancouver homes will still be out of reach.
Newbie
Jun 28, 2017
85 posts
29 upvotes
How is deregulation good for the market? The market has shown on many occasions that it is more than ready to drive itself off a cliff.
Deal Expert
Feb 29, 2008
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Tarrana & The Ri…
Frank2029 wrote: In a lot of cases it is because of him. He mentions a company and the shares fly.

On a side note. Trudeau and Trump have a lot in common actually. Both have done absolutely NOTHING since entering office!
Not really. He's riding high off of the effort of the previous president. But Trump is the type of guy that will take credit for things he has nothing to do with. Trump has done a lot of nothing.
[OP]
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Dec 7, 2012
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GTHA


Is the US Regional Indicator Symbol Letters Us recovery all down to Trumponomics?
When US President Donald Trump took office one year ago, he promised that economic protection and his "America first" approach would lead to great prosperity and strength.

He also vowed to change course on a number of international policies and agreements. That prompted warnings he might boost the US economy in the short term, but trigger a global depression.

Since then, there's been a number of positive economic data on the domestic front. The Dow Jones Industrial Average has raced past the 26,000 mark for the first time in history.

So how much credit can Trump take for some of the gains seen on the domestic front?

James Knightley, the chief international economist with ING Bank, says he [Trump] "can't really claim all that much. There was a huge amount of domestic momentum that really left retail sales, industrial production and consumer demand in general really, really quite strong."

"But also another thing he [Trump] can't claim, "is the strength of the global upturn. What has really caught economists and strategists by surprise is the strength in external demands - the strength of Europe, the recovery in Asia. This has come far quicker and far more aggressively than anyone had been expecting, so that in itself has also boosted the US because stronger export markets for US products have really boosted overall economic demand. And the dollar softness has made the US more competitive," says Knightley.
Sr. Member
Jun 10, 2013
589 posts
262 upvotes
This rally is definitely from the tax plan, not even a shut down could dent it. He's halving the corporate tax rate, that's massive. Not sure about the long term sustainability of his tax plan but markets are LOVING it! 21% last year and 7.54% YTD...Monetary policy is tightening as well (I suspect loose monetary policy pumped up stocks from the 2008 crisis - wish I was participating then...) But this new rally is a pure fiscal policy move.
Deal Addict
Oct 6, 2015
2463 posts
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Hobotrader wrote: This rally is definitely from the tax plan, not even a shut down could dent it. He's halving the corporate tax rate, that's massive. Not sure about the long term sustainability of his tax plan but markets are LOVING it! 21% last year and 7.54% YTD...Monetary policy is tightening as well (I suspect loose monetary policy pumped up stocks from the 2008 crisis - wish I was participating then...) But this new rally is a pure fiscal policy move.
But at some point, the euphoria is going to have to wear off and higher tax rates calculated as the Trump 'tax cuts' (its questionable if they're even tax cuts, given that effective tax rates were significantly lower than quoted) are temporary at best.

Smells like a plain old unrealistic dot-com bubble to me, just like the late 1990s that won't end well. Especially with no-earnings .com's such as Amazon, Netflix, Tesla going up every day independent of their earnings.
Sr. Member
Jun 10, 2013
589 posts
262 upvotes
burnt69 wrote: But at some point, the euphoria is going to have to wear off and higher tax rates calculated as the Trump 'tax cuts' (its questionable if they're even tax cuts, given that effective tax rates were significantly lower than quoted) are temporary at best.

Smells like a plain old unrealistic dot-com bubble to me, just like the late 1990s that won't end well. Especially with no-earnings .com's such as Amazon, Netflix, Tesla going up every day independent of their earnings.
We'll never know...best we can do is just keep taking returns and limiting losses through diversification/rebalancing =/. Crashes are inevitable and occur with frequent regularity.
Penalty Box
Apr 23, 2017
298 posts
190 upvotes
I don't blame Trump for delay in tax reform, failures in healthcare reform, and so on, because his own party is fighting him at every step of the way. He's not getting what he wanted, but what he can slowly negotiate out of the GOP.
Banned
Feb 23, 2009
1670 posts
1496 upvotes
Oshawa
zinger9 wrote: I don't blame Trump for delay in tax reform, failures in healthcare reform, and so on, because his own party is fighting him at every step of the way. He's not getting what he wanted, but what he can slowly negotiate out of the GOP.
Delay? It's only the first year. Got 3 more to go.
A true negotiator doesn't get everything but he gets enough.

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