Pretty much looks like the market has found its latest dose of speculation to rally around.
Yes, you guessed it right. The topic of whether or not President Trump will win re-election this November.
President’s uncanny response to the COVID-19 pandemic and civil unrest now sweeping the nation is a major talk now.
Seeing his approval numbers with Americans, some corners of Wall Street are starting to wonder if stocks are melting up.
The logic here is that the May jobs point to a sharp economic recovery ahead of the election.
This, along with a low-interest rate backdrop boosts Trump’s standing among Americans.
This undeniably reduces the likelihood of a Joe Biden presidency.
Voters in effect would be voting with their wallets.
A Biden presidency would mean higher corporate taxes and lower profits next year.
And possibly lower stock prices and general wealth creation. So you see who leads, right?
But it looks like investors aren’t even taking possibility of Biden winning,into consideration.
I mean, provided you are of the belief the stock market predicts outcomes six months into the future. *shrugs*
Since the jobs report on Friday, we’ve seen a steep but steady rise on the economic graph.
The Nasdaq Composite has enlightened to fresh highs now.
This constitutes the continued gains in big-cap tech names such as Microsoft and Amazon.
A record number of S&P 500 companies are now trading above their 50-day moving averages.
Meanwhile, a total of $21 trillion has been added back to global stock markets since the March lows and if this doesn’t speak volume, I don’t know what does.
In short, investors are taking on more risk in the face of valuations.
Which, of course, many would term frothy, given the challenging global economic backdrop.
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