Mohamed A. El-Erian , Columnist

Labels Matter: What to Call the Stock Rally

“Trump Trade,” “Reflation Trade” or “Liquidity Trade”?

May 26, 2017 at 6:00 AM UTC

Mohamed A. El-Erian is a Bloomberg Opinion columnist. A former chief executive officer of Pimco, he is president of Queens’ College, Cambridge; chief economic adviser at Allianz SE; and chair of Gramercy Fund Management. He is author of “The Only Game in Town.”

On election night.
Photographer: Alex Kraus/Bloomberg

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Although they are far from perfect, labels play an important role in providing shorthand signals for bigger phenomena. This, in turn, influences how people think about the past, present and future, and which actions would be warranted and why.

I would argue that the impressive ongoing stock market rally is such a case and that the various labels being attributed to it have different implications about its dynamics and determining factors, and how investors should think about positioning their exposure.