The Chicken Littles of the media warned that if Donald Trump became president, the stock market would crash. I don’t need to run you through the numbers to remind you just how unbelievably wrong of a prediction that turned out to be.
These observers were actually right, but only for a few hours in the futures markets on election night when it became certain that Trump would be victorious.
Even after the initial bump in the markets following the election, CNN warned: Don’t invest, the markets have gone too far, too fast. CNN’s Paul R. La Monica wrote on November 14th, 2016:
The big surge on November 7 snapped a nine-day losing streak for stocks that many attributed to Donald Trump’s newfound momentum. Wall Street had decided Clinton was going to be the next president — and they wholeheartedly approved.
So the fact that the market continued to rally last week after Trump won is, in some respects, even more surprising than the fact that he won in the first place.
The Dow jumped nearly 600 points — a 3.2% gain — in the three days after Trump’s victory. It was up again Monday and hit a new all-time high in the process. The S&P 500 and Nasdaq also moved a bit higher after Trump’s win.
But, he warned, “several market strategists expressed concerns that the market is underestimating the possibility of Trump rattling the markets during his time in office.” Another supposed threat to the markets? Trump’s immigration stance. “Trump’s anti-immigration stance could also be a big problem for U.S. tech companies, which have attracted a lot of talented foreign workers due to the H1-B visa program. Will Trump seek to end that?”
In conclusion? “Now this isn’t to say that the market definitely is due for a crash during the Trump administration. But experts think investors may now need to take a step back and remember that there still isn’t a lot that the market knows about possible Trump policies.”
Now, let’s take a look at how that prediction played out…
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