Aaron Brown, Columnist

What's Really Driving the Trump Bump

Share prices reflect inflation-adjusted earnings growth, which tend to rise more under Republicans.

August 9, 2017 at 12:30 PM UTC

Aaron Brown is a former head of financial market research at AQR Capital Management. He is also an active crypto investor, and has venture capital investments and advisory ties with crypto firms. He is the author of the soon-to-be-released "Wrong Number."

But can it stay up?
Photographer: Tony Ashby/AFP/Getty Images

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With the stock market at highs and amid positive economic news, the so-called Trump bump is salient. The left credits Obama administration policies, which Republicans are screwing up. Right-leaning commentators treat the bump as optimism about the Republican agenda, which Democrats and party infighting are undermining.

Of course, boosting the stock market isn't the primary job of a president, and the president isn't the primary driver of stocks. Nonetheless, the 80 percent of the American populace that makes up the political center likes a vibrant economy. But that means real1502213920516 earnings growth, not high asset prices. Earnings drive business expansion, hence wage and job growth, hence tax revenues.