US stocks continue to rise despite predictions of a decline, with the S&P 500 up 5% and Nasdaq tech stocks up 7%. This trend has been driven by investors pouring $140 billion into US equities, earning it the nickname “Trump Bump.” Economists have been left puzzled as to why markets are not responding to gloomy analyses of President-elect Trump’s policies.
Keynes’ maxim, “when facts change, I change my mind,” seems to be applicable here. While Trump has announced mass deportations and tariffs on Canada and Mexico, experts argue that these measures are unlikely to have a significant impact in the short term. The federal border agency’s resources are insufficient to deal with millions of cases, and the promised tariffs may be staged-managed to gain concessions from other countries.
The economic team surrounding Trump includes Wall Street veterans who prioritize maintaining market stability. This includes reducing taxes and deregulating industries. These appointees seem to be more concerned with avoiding a financial crisis than implementing protectionist policies. As investors continue to flock to US equities, it remains to be seen whether the “Trump Bump” will sustain itself in the long term.
Source: https://www.lemonde.fr/en/opinion/article/2024/12/11/trump-is-good-if-not-for-the-economy-at-least-for-the-stock-market_6735927_23.html