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Why are markets rallying since Trump won the elections?

Sunday, March 12, 2017 4:20
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Analysts across the world waited with a lot of anticipation for Trump’s first address to the joint session of US Congress at the end of February; with the hope of getting very specific action points from the president at least for his first 100 days in office. Although not much came out of the speech that was regarded to be his first “presidential speech”; the markets still got swayed a little bit and continued with their upward trajectory. Trumps speech focused on reconciling and unifying the United States of America and he reiterated his campaign promises without giving very particular pointers as to how he was going to achieve them.

The high level approach to addressing his performance and the planned development issues left many investors and political analysts across the world in a bewildered state. The same uncertainty that has encompassed Trump since he won the US presidential elections seem to be carrying on even after having been in the Oval Office for more than a month and a half. Is it that Trump does not have clear plans on what he wants to do for the US; and so he is still buying time to consult further before outlining the work plan for his administration? Or is it that President Trump is the wise deal maker and negotiator who plays his cards close to his chest and then unleashes them at the opportune moment to strike the opponent out of the game?

Any of the above two rhetoric questions could be the case; but following how markets are reacting to Trump’s policy changes and his public remarks, there is more confidence in the man at the Oval Office than there is doubt. This applies at least to investors in the US who seem to be excited about the future of the country under Trump presidency. Regular market updates on Saxon Trade Facebook all point to bullish tendencies in the US financial markets; which is a reflection of positive sentiments from the investors. If the perceived uncertainty surrounding Trump’s presidency were driving the market; then the reverse would be true where the US greenback would be depreciating against other international currencies, while the stock market slides to the south.

With the Dow Jones having surpassed the psychological limit of 20,000 and the S&P 500 having maintained its upward trend since, November 2016; then there must be a secret sauce to Trumps presidency that no one wants to speak out aloud. Maybe Trump is the president that the US has been waiting for; one who calls things as they are and is not ashamed to be slammed with all demeaning labels for as long as he speaks out his mind truthfully. Or maybe Trump is a true representation of the deep rooted desire by a majority of the US people to adopt populist ideologies for self-gains. Whereas any of these could be a possibility, the most logic explanation of the implied confidence in Trump, amid the expressed doubt through public condemnations; is that Trump has mastered the art of appealing to the inner desire of the American people and fueling their hope for a better tomorrow.

From his campaign days all through to the latest speech in Congress, Trump has artistically painted a very vivid picture of a failing nation that the US is. He has succeeded in making most citizens in the US feel that their basic human rights were violated by the previous government and that he comes in as the only man with the antidote to the rapidly deteriorating situation. From infrastructure development and national security issues, to job creation for the US citizens; Trump has made sure his message of “no one will be forgotten any more” is drummed into people’s mind permanently. To the business class, he has ensured that their main challenge of high cost of doing business is being tackled in his promises through tax cuts and incentives for producing goods and services locally for the American people.

By appealing to the core challenges that people face every day be it individual citizens or businesses; Trump appears to be a better option for the US as a nation by addressing head-on issues other leaders might not prefer to face directly. The more he repeats those messages of hope and continues to paint a picture of glorious America under his leadership; he succeeds in keeping people hopeful for a better future even when he actually does nothing. But how long will the suspense last before the bubble busts? Investors are usually very impatient people and soon they will start reacting if nothing tangible comes out of Trumps promises. How long that will take is not known, but the reality will dawn soon.


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