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Post By
Sumidor

Member Since: Sat Feb 25, 2017
Posts: 131
In Reply To
zvelf

Member Since: Sat May 17, 2008
Posts: 8,783
Subj: Re: Stock market comparison
Posted: Tue Feb 06, 2018 at 10:04:34 pm EST (Viewed 41 times)
Reply Subj: Re: Stock market comparison
Posted: Tue Feb 06, 2018 at 06:40:32 pm EST (Viewed 43 times)



    Quote:

      Quote:
      Yes, the stock market was increasing under Obama, but the *rate* of increase significantly increased once Trump was elected.



    Quote:
    That's not accurate. Going by where the stock market went from the moment of Trump's election is disingenuous because he wouldn't even be in position to affect anything in office for another 2 1/3 months while Obama could affect things. Since Trump took office, the stock market has gone up 25.6%. In Obama's last full year in office, the stock market went up 23.8%. It's not that big a difference. And if you measure the same period during which Obama first took office from January 2009 to January 2010, the stock market rose 33%, an even higher rate than Trump's first year.


Many times I'll say that we simply disagree, or that we have different points of view...but in this case I can say that you are absolutely 100% incorrect. Your intense dislike of Trump has caused to you make comments in a topic you don't have sufficient knowledge to speak about. The stock market is forward looking. Values of companies are not simply based on information as it stands today (such as who currently sits in the oval office), but also on expectations of the future (such as what changes are coming). This is finance 101. Do an internet search for "stock market forward looking", you'll see finance websites (not political sites) stating "the stock market is a forward looking mechanism", "the stock market is a forward looking indicator", etc. It's why the market hates uncertainty. If certain future expectation are uncertain, values of firms into the future can't be made.

The stock market did not wait until inauguration day to reflect an impact from Trump. It doesn't work that way. The impact was reflected immediately after election day. Future expectations of tax cuts and less regulations led to a perceived increase in value for U.S. firms. This is why the market did not have a strong reaction the day the tax bill was passed. The corporate benefits had already been baked into the market weeks and months before the bill was signed, based on the expectation that it would be signed.

Of course that means if the tax bill had failed to pass as we got deeper into 2018, the market would have seen a significant downturn. Those expected gains, which were already accounted for, would have to be reversed.

The above isn't politics, it's not my opinion, it is how the stock market operates.




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