Donald Trump’s election, we were assured by breathless pundits across the cable television spectrum, would bring on the end times with such suddenness that America would hardly know what had hit it.
In fact, as soon as the 270th electoral vote was counted for the Manhattan billionaire, we were pretty much told that Trump had taken Famine’s place in the Four Horsemen of the Apocalypse. (He was always the Ringo of the group, anyhow.)
The first thing to go, punditland assured us, was the economy. So, the day after Donald Trump won, the Dow Jones Industrial Average … climbed to what was almost an all-time high?
Yes, not every prediction turns out well. Just ask almost every pollster.
According to CNBC, even though there was a massive selloff of stock futures in the overnight hours, the market closed up 250 points to finish at 18,589. An earlier rally saw the market up 300, which came close to the all-time record.
One analyst pointed out that the market hates uncertainty, which was the reason for the futures selloff.
“Overnight was all about uncertainty. Today we know,” JJ Kinahan, chief strategist for TD Ameritrade, said.
“Within financial services, there is a guarded view that there may be less regulation (under Trump) than under a Clinton presidency,” John Stadtler, head of U.S. financial services at PwC, added.
Those of you who watched the bleary-eyed hours of network coverage, where it became increasingly likely that the next president would be Hillary Clinton, probably noted the media talking about the falling Dow futures. In fact, it was mentioned as a kind of grim incantation against any sort of levity on set. Not that most media outlets had much trouble maintaining the down mood.
What they didn’t mention is that futures almost always fall in the uncertain hours of a presidential election, often to be shored up when the final result is known. It’s the next day that shows how the markets will react to political change, or the lack thereof.
The Dow Jones isn’t the only indicator of economic success, but a higher market both injects more money into the market and augurs well for what Wall Street thinks of what Trump can do with the U.S. economy.
What happened on Wednesday is a sign of tentative optimism from investors, buoyed by Trump’s conciliatory victory speech and the possibility of infrastructure investment. It remains to be seen whether it will be maintained, but for right now, Trump is going to be smiling.
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