It’s not about Trump, or even the U.S. The U.S. economy is continuing to grow at about the same slow pace it has for most of the now eight-year-long expansion, but economies elsewhere in the world are picking up speed. That same IMF World Economic Outlook report that discounted the chances of tax reform and predicted U.S. gross domestic product growth of just 2.2 percent in 2017 and 2.3 percent in 2018 upgraded global GDP growth estimates to 3.6 percent in 2017 and 3.7 percent in 2018. The companies in the Standard & Poor’s 500 Index got 43.2 percent of their earnings from outside the U.S. in 2016; that percentage will surely be higher this year, and it’s probably higher for the Dow companies, too. Recent analyses by the Wall Street Journal and ETF.com found that corporations with the highest foreign-earnings percentages are driving the market’s gains. The “America first” president may be basking in a market boom driven mainly by overseas economic growth.
Josh here – I reiterate what I’ve been screaming about all year – the rally in the US stock market in 2017 no more belongs to the President or his non-existent “agenda” that never goes anywhere than the 2008-2016 bull market belongs to Obama.
This year, virtually every country stock market around the world is substantially higher – from Europe to Asia to Latin America. The S&P 500’s advance is actually trailing the average country market’s return. And US corporate giants are more global than ever before. Nothing the President or Congress have done during this administration has been material so far. And as the legislative calendar winds down, it appears that this is yet another year of mostly gridlock.
Running around in a red hat taking credit for an international synchronized economic recovery, that was already well underway, is perfectly on-brand for these people; it’s both solipsistically dumb and a lie.