When Trump took office, the left prognosticated that the stock market would crash, the U.S. dollar would collapse, and doomsday would arrive. Did that happen? Like all the other predictions during the 2016 election, the left was dead wrong.
It may be a bubble induced by the Federal Reserve’s money-printing ways, but stockholders will most certainly deck the halls with boughs of holly when they examine their 2017 market returns. Everything from increases in share valuations to boosts to quarterly dividends, how can you not break into a Christmas melody around this time of the year?
Perhaps you missed it because you consumed too much of the Counterfeit News Network in 2017 or you were too busy protesting the administration by screaming at the sky, but there have been multiple milestones. Here is what has happened at the New York Stock exchange in 2017: the Dow Jones has risen 5,000 points, the S&P 500 surged 18%, and the Nasdaq Composite topped 7,000 points for the first time in history.
And we’re just getting started, if you believe President Donald Trump. Speaking before a cabinet meeting last Wednesday, the president predicted that the Republicans’ new tax code plan will lead to an even stronger stock market.
The Treasury Department also projected earlier this month that the economic expansion would continue for another few years. In other words, the Trump trade will persist on into 2018 – and beyond?
Let’s assess some of the specifics as to why shareholders are singing Handel’s “Hallelujah.”
Oil is Great Again
Liberty Nation has tracked oil’s progress this year, and the best way to describe it? Saudi America.
West Texas Intermediate (WTI) crude prices have stabilized well above $50 per barrel, while Brent crude prices have topped $60. Oil has advanced roughly 10%, and U.S. producers are taking advantage of the higher rates. According to the Energy Information Administration (EIA), the nation’s output has reached 9.8 million barrels per day (bpd), the highest it has been in 47 years.
It was a bloodbath in the international oil market a couple of years ago, but Texas Tea is booming again.
Dow’s Many Incredible Milestones
How big was 2017 for the Dow Jones Industrial Average (DJIA)? The Dow experienced its 70th record close on December 18, beating the 1995 record of 69. Many milestones were made over the past year.
A few days following Inauguration Day, the Dow Jones Industrial Average (DJIA) closed at 20,000. Five weeks later, the Dow settled at 21,000. By the end of 2017, the index is inching towards 25,000.
Is this a case of irrational exuberance? Perhaps, but, like his predecessors, President Trump is milking it for as much political capital as possible heading into the midterm elections.
Stocks Hit All-Time Highs
You may kick yourself for not buying shares in any of the FAANG stocks when they had their initial public offerings (IPOs), but you may also regret not hitting the buy button at the start of 2017.
Facebook jumped from $120 to $185. Amazon soared from $800 to $1,200. Apple rose from $120 to $177. Netflix went from $120 to $204. Google surged from $800 to $1,085. And, yes, these are all record highs.
It wasn’t just the sexy stocks that experienced meteoric increases.
FMC Corp hit an all-time high of $95. Allstate Corp nabbed a record-high of $105. NextEra Energy shares swelled to just under $160 – another record high. Starting to see the trend?
This can’t possibly continue forever, can it?
The Perpetual Bitcoin Boom
Akin to the Tulipmania, Roaring Twenties, and dot-com boom, we are residing in the MOAB, mother of all bubbles. Bitcoin, the peer-to-peer decentralized virtual currency, had one hell of a year.
Starting off 2017 quietly trading at just under $2,000, bitcoin skyrocketed to $19,000. It took a mere two hours to go from $16,000 to $17,000, and only three minutes to spike from $18,000 to $19,000.
The price and popularity have spurred entire markets, like bitcoin futures contracts and initial coin offerings (ICOs). The strength of bitcoin seeped into various pockets of the market, too. For instance, Advanced Micro Devices, a developer of computer processors, surged to a 52-week high of $15.65.
Because investors are betting that the cryptocurrency will climb even higher in 2018 – hopefully doubling in just a few minutes – everyone including your grandmother is purchasing some bitcoin.
When your 91-year-old grandma is buying digital currency, you know something is up.
Exporter? U.S. Dollar Dips 10%
The U.S. Dollar Index initially spiked when Trump became president. Since then, however, the greenback has tumbled to pre-election lows. If you’re an importer or a traveler, then you’re unhappy with this development. Yet if you’re a manufacturer and exporter, then you’re thrilled by a weaker dollar, which dipped 10% in 2017.
One of President Trump’s major campaign promises was to rejuvenate the manufacturing sector. Has he achieved this? Well, many companies have decided to either open new plants and factories or keep operations in the Land of the Free. Also, U.S. exports have grown from $192 billion per month (January) to nearly $200 billion a month (October).
Exporters generally benefit from a lower Federal Reserve Note because it is cheaper for foreign buyers to purchase American-made goods.
It is true that Trump campaigned on a stronger dollar, but then he tergiversated and mulled over reversing the strong-dollar policy of the last 20-plus years. Whether he wanted to or not, the U.S. dollar is lower than where it was the same time a year ago, and this is a boon for the export industry.
Merry Christmas Stockholders!
You may be a seasoned independent trader holding a plethora of stocks. You may be a passive investor with a few mutual funds. You may be maintaining a pension fund, public or private. In any case, your portfolio has gone up, and up, and up over the last 12 months. A Fed pump or a Trump trade, you may want to take your profits now and sport a MAGA hat on the street.
Did you leave Santa Claus more than milk and cookies? Some caviar and champagne, perhaps?
Did you benefit from the Trump economy in 2017? Give us a call on our LIVE Author chat line to ask us a question or tell us what you think!
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