Trump and stock markets - November 05, 2017

Trump and stock markets

Donald Trump claimed that he made stock markets surge in an “unprecedented” way since his election, but “fake news media” didn’t report on it. Business Insider put the claim under the magnifying glass and found that it’s not true. We have analysed markets since Trump’s presidency and found the same.

As it became usual, the president of United States announced his newest claim on Twitter, saying that “It would be really nice if the Fake News Media would report the virtually unprecedented Stock Market growth since the election.Need tax cuts”.

Is the claim true?

After Trump’s tweet, Business Insider analysed the truth in the president’s claims. They concluded that “while he drove some periods of gains, there were many other times when the market climbed higher for other reasons.”

The journal also created a chart showing how other presidents made the stock change after their elections, and this shows that this had happened before several times, even after the second election of Barack Obama. As they wrote, “maybe it's time to conclude that presidents don't really have a huge hand in determining stock gains after all.”

What about our analyses?

After Trump’s election we also made an analysis about his first 100 days and the changes in stock market prices. In this, we concluded that Trump remained a promise to the markets as he didn’t manage to reach the changes he promised.

Performance of S&P 500 during the first 14 weeks of US presidents

We also created our chart showing the last presidents’ performance through S&P500 in their first 100 days, and found that though Donald Trump was in the strong middle, he didn’t do anything unprecedented. It was also interesting to see how the sectors he said he will strengthen fell, while the ones he continuously attacked grew.

Performance of IT and construction companies during the first 14 weeks of Trump

Did he make coal fly?

It was also interesting to see how he impacted the coal market. In his campaign he said several times that he’s planning to give back the prosperity to the industry it once had. The president even underlined that he’s not believing in climate change and the US even left the Paris Accordance. All these things didn’t make coal industry fly, though.

Renewable energy is becoming more and more important, no matter what Trump does to coal. This also shows in the prices of stocks and the commodities. Our conclusions together with the Bloomberg analysis shows that changes in the markets may be less connected to presidents (and more to markets in general) than many tend to believe.

Disclaimer: This analysis is for general information and is not a recommendation to sell or buy any instrument. Since every investment holds some risk, our main business policy is based on diversification to minimize threats and maximize profits. Innovative Securities’ Profit Max has a diversified portfolio, which contains liquid instruments. This way, our clients can maintain liquidity, while achieving their personal investment goals on the long term.