, Columnist
Trump's Policies Have Done Nothing for Stocks
Earnings growth, not promises on deregulation, taxes or infrastucture, is responsible for most of the appreciation in equities.
Let's see how it turns out.
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Immediately after the U.S. presidential election in November, market commentators described the rise in equity prices and Treasury note yields as the “Trump Trade.” The idea was that favorable policies from Washington in the form of lower taxes, deregulation and infrastructure spending would boost growth and corporate profits. Since then, with the prospects for aggressive fiscal policy fading, a number of high-profile commentators have argued that U.S. equities are poised for a big drop.
However, this narrative assumes that fiscal policy expectations are pushing up stocks. This is a flawed assumption. The driver of higher stock prices can largely be traced to stronger corporate earnings and economic data.