Wednesday, October 18, 2017

If Trump is doing so horribly, why is the stock market doing so well?

In case you're still not convinced, here's a breakdown of what has driven the gains this year.

In case you're still not convinced, here's a breakdown of what has driven the gains this year.

'The seasonal factor is playing a big role.'

"The seasonal factor is playing a big role. We're out of the 'sell in May and go away' timeframe. Historically, this last part of the year has represented a time when stocks do well, and I think that's sucking in some money from the sidelines. We've been waiting for a correction that hasn't come, and it's increasingly looking like we're not going to get one — at least to the degree people were expecting. Between now and the end of the year, I think people are going to keep buying, with good earnings still coming in."

— Walter "Bucky" Hellwig, who helps manage $17 billion as senior vice president at BB&T Wealth Management

'Economies around the world have performed better'

"The underlying economy has performed better than a lot of people expected. You're starting to see a lot of capital expenditures take place through corporations. You've got better confidence coming from individuals. There's not as much concern about the Fed aggressively raising rates. And the economies around the world have performed better. It's a broad-based growth picture that's not necessarily strong, but is beating expectations.

There's nothing to sell off of. As long as rates remain under control and restrained, the economy is doing better, and provides the big picture for what's going on. It's helping to stabilize the stock market. Not to mention there aren't many alternative places to put your funds. That's driving a lack of selling."

— Bill Schultz, who oversees $1.2 billion as chief investment officer of McQueen, Ball & Associates

'The new records have everything to do with earnings.'

"The new records have everything to do with earnings. You really don't need to get much fancier than that. Over time, earnings have been what's determined the direction of the market — far more than interest rates or anything else. It was about a year ago that earnings were really stuck in the mud, but there's been a tremendous improvement from the expected growth rate, which is all tied to the economy.

It's obvious that the stock market follows earnings, but the market narrative always wants to find something more interest. But the reality is very simple: the market has gone higher because earnings have improved."

— Kevin Caron, market strategist and portfolio manager, who helps oversee $180 billion at Stifel Nicolaus


Source: Business Insider India