By Chris Lowe – The Inner Circle (USA) –
Markets have gone “full Trump”
On hopes the president-elect will slash taxes… splurge on infrastructure… and blow out the deficit… stocks have gone berserk.
On Monday of last week, the Dow, the S&P 500, the Nasdaq, and the small-cap Russell 2000 all hit new all-time highs.
Sounds great, right?
But as Bill recently warned Diary readers:
The last time that happened was on the last day of December 1999. Just a few months later, the dot-com bubble burst and the tech-heavy Nasdaq lost 80% of its value. And the U.S. stock market, overall, lost about 50%.
Last week, we laid out the bullish case for U.S. stocks under a Trump administration. We’ve also covered why Trump’s spending plans could trigger the end of the 35-year bull market in bonds.
But Bill’s motto is: “Sometimes right… sometimes wrong. Always in doubt.” So today, we question both those ideas.
It’s been less than a month since Donald Trump’s surprise win over Hillary Clinton. And it may be the case that the recent “reflation trade” – betting on rising stock prices and falling bond prices – won’t last, as traders and investors learn more about the Trump administration… and the challenges it faces.
As you’ll learn in this week’s dispatch, Kris Sayce, our chief strategist in Australia, believes the market’s euphoria over the Trump win will be short-lived.
And he’s not alone. As Bill concluded in the November issue of the Bill Bonner Letter, “What Trump Means for Investors” (paid-up subscribers can access it here):