Opinion: Beware of the ‘Trump dump’ in stocks as rally peters out – MarketWatch

The election didn’t go the way a lot of people were expecting, and now people are preparing for change as Donald Trump gets ready to take his place in the White House. But what effect will that have on the USA– and on the stock market? “Opinion: Beware of the ‘Trump dump’ in stocks as rally peters out – MarketWatch” suggests the market may suffer…

Key Takeaways:

• The stock market has rallied since the presidential election on expectations fiscal-stimulus policies proposed by Donald Trump will benefit the economy. That might be justified, but that doesn’t mean the stock market can continue to rally in the short run.
• Laying the groundwork for new U.S. manufacturing jobs takes time; putting money in the hands of working-class Americans takes time; and getting them to spend more aggressively and invest that money takes even more time. That is sustainable, whereas monetary policy stimulus is not.
• The problem is, at least for the stock market, if he makes other countries believe that he is capable of implementing a trade war, the stock market will believe it as well, and trade wars are not healthy for companies’ earnings growth.

“The problem exists in the near, not the long, term. On a near-term basis, the hand-off from monetary-policy stimulus to fiscal-policy improvements can have a material adverse impact on asset classes.”

http://www.marketwatch.com/story/beware-of-the-trump-dump-in-stocks-as-rally-peters-out-2017-01-11