Why Are Us Stock Markets Still Hitting All-time Highs?

Discussion in 'General Trading Discussion' started by longtermbull, Jan 13, 2018.

  1. longtermbull

    longtermbull Administrator Staff Member

    Joined:
    Nov 2016
    Posts:
    1,720
    Likes Received:
    20
    Is it just me or are US stock markets fast becoming overvalued? To hit all-time highs against a backdrop of a very volatile and fast-moving political situation seems a little far-fetched to me?
     
  2. JR Ewing

    JR Ewing Super Moderator Staff Member

    Joined:
    Feb 2014
    Posts:
    4,950
    Likes Received:
    39
    I think it's largely deregulation coupled with the anticipation of corporate tax cuts increasing corporate profits, expansions, etc... along with individual tax cuts leading to higher consumer spending, prosperity, investment, etc.

    Taxes and especially regulations are largely what drive (or stall) markets. Eccentricities of a sitting POTUS mean little when the government is largely getting out of the way and letting the private sector do its thing.
     
  3. longtermbull

    longtermbull Administrator Staff Member

    Joined:
    Nov 2016
    Posts:
    1,720
    Likes Received:
    20
    I have seen many situations where markets expect great things - the momentum builds and builds to a level where it is impossible for the government/economy to deliver on investor's high hopes. Then bang! We have a rethink by investors and a whole change in attitude.
     
  4. manoharb

    manoharb Senior Investor

    Joined:
    May 2015
    Posts:
    281
    Likes Received:
    2
    Weakness in Dollarindex is bringing huge FII investment in American equity Markets. and This movement will get continued Until ECB increase rates. ECB still not increased rates, Only Canada, UK, US these countries are increasing rates.

    Economically, American 'Pivot to Asia' policy is working in favor of Global investors and Battle against Corruption, Pollution, Terrorism etc.. Future of Global Economy depends on Political decisions or changes made by Politicians and In this Long Term race US and Europe already made some good changes, How Asian Politicians work together for better system in Asia ? is important question. Religious wars, Land disputes and Terrorism such concepts must be wiped out from Asia for better civilization. At least , Asia need 8-10 years from here to do that so US is in good position.

    Some Americans like Baba Vanga made prophecies, US will end in 2025.......... I totally disagree with that. US is in much better position compared to other countries. Where is chance for improvisation, Every investor invest there. That's what I call progressive nation. Countries where Politicians believe our system is perfect, No chance for improvisation, better Investors stay away from such country. US have great potentials of going more ahead as a progressive nation.

    After Pivot to Asia achieved , new phase of Global Economy will start where In some countries, Nationalism will get polarized in future. US is also a big country with Diversity so Long-term Potentials are very good. Polarization create dictators and Diversity and Democracy admire constitutional improvisation rather than Polarized Nationalism.
     
    Last edited: Jan 21, 2018
  5. gowiththeflow

    gowiththeflow Senior Investor

    Joined:
    Jul 2017
    Posts:
    1,041
    Likes Received:
    9
    I presume this is a trend which began some time ago because the efforts of Donald Trump certainly leave much to be desired. Personally I think the European Union is in big trouble, everyone is focusing on the impact on the UK when Brexit is completed but the European Union was in trouble before the UK decided to leave. Many people seem unaware that the UK was one of the few net contributors to the EU budget therefore the shortfall, and future budget increases, will have to be found by other members.
     
  6. JR Ewing

    JR Ewing Super Moderator Staff Member

    Joined:
    Feb 2014
    Posts:
    4,950
    Likes Received:
    39
    As an American small business owner who regularly talks to many people (from big executives to other small business owners to blue collar workers), I can tell you that the tax cuts and the deregulation we've seen in the last year have opened things up like we haven't seen in nearly a decade and a half. And the markets have gone virtually straight up ~ 45% since the election on Nov 8, 2016 after several years of stagnation, and in an increasing rate environment - that sort of thing just doesn't happen very often.

    I'm not saying Trump himself is the cause of these things. But I believe that the unexpected outcome of the election - that of course led to the unexpected change from the overregulation of the prior 8 years - has radically stimulated our markets and energized our private sector. It's certainly not anything the prior administration did that is causing this sudden explosion of economic growth. Nor is it caused even by a weakening dollar or what is going on overseas - at least not to any major degree.

    I don't care for some of Trump's tweets or rhetoric, but his and congress's actions overall are far better for us Americans than what we'd had to live with the prior 8 years. I'll give credit where it is due.
     
    Last edited: Jan 24, 2018
  7. Chartman

    Chartman Senior Investor

    Joined:
    Sep 2017
    Posts:
    703
    Likes Received:
    8
    Interesting comments JR - it is good to hear the view from on the ground rather than the anti-Trump retoric we hear in the media every day. Could I ask what area of business you are in JR?
     
  8. JR Ewing

    JR Ewing Super Moderator Staff Member

    Joined:
    Feb 2014
    Posts:
    4,950
    Likes Received:
    39
    My business is Independent professional money manager / investment advisor.

    I think that if we can gut the regulatory excesses of Dodd-Frank (if not toss the whole bill), we'll be doing even better than we have been in the last 12-15 months.

    Some regulation is of course needed. But our government tends to go way overboard - especially in one of the two major political parties. Our government has gotten too big in recent years, and the lobbyists, big donors, and other special interests have been able to get rich and powerful by renting politicians, who themselves often get rich via their access to resources the rest of us don't have access to.

    Our government and politicians are too corrupt and self-serving to be trusted to any degree, and our media is corrupt and is basically the public relations propaganda arm of our big govt democrat party. Academia and the entertainment industries are also heavily leftist and often militant on the whole.

    Trump does sometimes give the media and the other party ammunition that I wish he would not. But even if he was perfectly presidential, or even if another of our republican candidates (such as GOP runner-up Ted Cruz) had won the GOP nomination and the general election, the media, the dem politicians, academia, and the entertainment industries would still be trying to destroy the republican POTUS. They were all 100% invested in the corrupt, big govt leftist democrat Hillary Clinton - and almost no one expected to see a republican get elected (especially Trump). They're all pissed that the country's radical leftist turn it took under Obama would be halted and reversed at least somewhat by a republican president.

    There's even evidence emerging (after most of us already figured it out some time ago) that the Obama admin politicized the FBI / DOJ (like they had years ago with the IRS and other agencies to target political foes) and used it to not only obviously get Clinton off the hook [from her serious crimes committed while secretary of state - espionage, obstruction of justice, gross negligence, accepting bribes from companies and foreign nations, etc - that greatly enriched her and her husband Bill]... but also to try to frame Trump for "Russia collusion"... even though "collusion" itself is not a crime, and there is zero evidence that Trump committed ANY crimes - much less that he and Putin got together to somehow hack into election polling station computers in several close "swing" states to change the voting results so that he would win those states and thus win the Electoral College... The left could not accept that Clinton was a horrible, corrupt person who could not inspire enough people in enough states to vote for her in order to win the EC. Her campaign in fact paid intermediaries to pay Russians (a crime) for dirt on Trump - i.e. the phony "dossier" that was apparently illegally used by the govt to get FISA warrants.

    Just look at some of the things the media dogs Trump about - his wife's choice of shoes, his fondness for McDonald's burgers and Diet Coke, his eating pie and 2 scoops of ice cream for desert (instead of the one scoop his guests are limited to), etc.

    The thing about the US is that we are heavily divided. Roughly half of us want smaller govt (other than a strong military), lower taxes and regs, are Constitutional originalists, are big on being self-sufficient, free, independent, etc... The other half of the country want a big govt nanny state, huge domestic entitlement spending, higher taxes and regulations, and also wide open borders (in an effort to import a more leftist voter block in), etc. Those of us in the first group are going to tend to think a conservative politician is doing a good job. Those in the latter group are going to be unhappy when the conservatives are in power.
     
  9. Chartman

    Chartman Senior Investor

    Joined:
    Sep 2017
    Posts:
    703
    Likes Received:
    8
    I understand everything you say and there is a similar situation emerging in the UK - the left are acting as if they are in power when they are not and any positive economic/business annoucement is spun to be negative and all negative issues (such as Carillion, the UK government private sector public sector services provider of choice collapsing) used to heap pressure on a government voted for by the people - whatever happened to democracy?

    I will give you a prime example of how it is in the UK at the moment. When Cariliion (a stock market listed company) was on the verge of collapse with debts of £1.5 billion and it looked like the government would be forced to bail them out, there were cries of "Look at the capitalists looking after their own, wasting taxpayers money on a bailout, boo boo". However, come Monday morning and the government refused a tax payer funded bailout the cries were now "What about all of the jobs at risk, the government should have bailed them out". With a left leaning media the right - in the UK the Conservatives - are painted as the devil incarnate. The left keep banging on about democracy, well the UK electorate voted and the left lost but that does not stop them stirring resentment and fear amongst the public with people now afraid to say they voted Conservative - funny how the left parties view of democracy varies whether they are in power or not.
     
Tags:

Share This Page