Sean Spicer, the former White House press secretary, was seen by many as Donald Trump’s biggest fan. He forged a close relationship with the president but it appears that a bid to bring in more communications experts forced his resignation. The position of White House press secretary will be taken by Anthony Scaramucci, a Wall Street guru and a former critic of Donald Trump. He is already been described as Donald Trump’s “spin doctor” which does not bode well for the future.
Revolving doors of the White House
Unfortunately we have seen an array of highly skilled and highly experienced personnel exit the White House after seemingly disagreeing with Donald Trump. We have seen problems with the FBI, ongoing investigations into the “Russian connection” and regular accusations of conflicts of interest in Donald Trump’s business dealings. It is common knowledge that a number of US politicians are pushing behind the scenes for Donald Trump to be impeached and removed from office. At this moment in time it is unlikely he will be impeached but with new evidence and new accusations on a daily basis, who could rule this out in the future?
Markets need calming political background
When you bear in mind the performance of US markets over the last 12 months, many hitting all-time highs, this does not sit well against the worsening political background. We have the Russian issue, forthcoming steel tariffs, the revolving doors at the White House and the reluctance of Donald Trump to take any blame whatsoever. If you look back, not once has Donald Trump stood up and taken the blame for any issues. He looks back to Barack Obama and he has even been openly critical of his closest allies. Is anybody really safe from the infamous Trump backlash?
Over the last few days the stock market volatility index has fallen to a record low, the vast majority of experts believe further upside in markets is inevitable but Donald Trump continues to do is best to upset the apple cart. Are we really in a situation where political volatility and economic uncertainty are being dismissed by professional investors?
Calm before the storm
As we touched on in one of our recent articles, if you look back at the great stock market crashes you will see that just days prior to the markets turning, so-called experts were still positive. If we look at the markets today, they have risen significantly over the last 12 months, hitting record highs, yet even though valuations are stretched on current trading many still predict further growth in the short to medium term. Even those investors who refused to follow the bull market trend after Donald Trump was inaugurated have been dragged kicking and screaming into this bull market rally.
We have seen direct criticism of the president, talk of steel tariffs, economic forecasts from the Trump office at odds with the Fed and stock valuations seemingly stretched to the limit. Remarkably, these issues have failed to ring alarm bells amongst investors and many continue to plough money into a market which is beginning to look overvalued – unless we see a significant improvement in economic growth forecasts. Ask yourself this question, would you feel comfortable investing in US stock markets at current levels?