Many of us in the US have been swept up by what’s come to be known as the ‘Trump Rally.’ The guise for this massive rise in stock prices over the past few months has been the promise of business-friendly tax reform, deregulation and infrastructure spending, among other ‘shareholder-friendly’ initiatives.
The main theme has been one of ‘America First,’ which has elicited concerns about how far protectionist policies may go, and what the impact to our trading partners will be. Still, others wonder how far asset prices will fall if and when the Trump administration runs into problems implementing their agenda – as we’re starting to see.
But I have a question.
If this Trump rally really is predicated on domestic policy changes that will enhance the US economy (almost assuredly at the cost of our trading partners), then why is the rest of world also enjoying this ‘Trump Rally?’ Shouldn’t they be in ‘Trump Correction?’
Take a look at the chart below to see what I mean. This chart shows ACWI, the ETF that tracks the All Country World Index – an index comprised of equity returns in 23 developed countries and 23 emerging markets.
This post was published at FinancialSense on 04/04/2017.
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