“Trump rally” or “SS is over rally”?


I get easily confused, and I like it very much when people (usually much smarter people than me) help me clear my confusions.  One such incidence concerned the so-called Trump rally — luckily, in a recent column, Barry Ritholtz insightfully observes that the so-called “Trump rally” is perhaps not about Trump because most advanced country stock markets have rallied at least as much since last November. This suggests that the current market narrative is wrong and that we might have a broader phenomenon at play, like an “improving economy and corporate profitability”. Even more broadly, it could be about the fact that “secular stagnation” was perhaps an overstatement for the kind of malaise the global economy — particularly the advanced countries — found itself in since the global crisis.

So what should we think? Hard to tell — but here is a guardedly optimistic Economist article that is worth a read. After speaking of previous disappointments, the article observes that “[t]he breadth of the improvement—from Asia to Europe and America—makes for greater confidence that a pick-up is in train”, but does not ignore the risks such as tight commodity and labor markets (that could weaken consumption, the latter combined with low productivity growth) and a Fed that might go faster that the global economy can handle…