Since November 8th, Election Day, the Stock Market has posted $3.2 trillion in GAINS and consumer confidence is at a 15 year high. Jobs!— Donald J. Trump (@realDonaldTrump) March 2, 2017
The dollar, sometimes a bellwether for U.S. economic confidence, has slumped almost 2 percent in March and is close to erasing a more than 6 percent rally since Trump’s election in November. The Bloomberg Dollar Spot Index, a gauge of the American currency against a basket of global peers, is down 4.9 percent since peaking at a record Jan. 3….After an extended leave of absence, the so-called fear gauge is back. The Chicago Board Options Exchange Volatility Index jumped 15 percent last week, the biggest such gain this year, as it became apparent the health-care bill was not going to survive a vote in the House.
Political commentators should actually interpret the markets’ reaction to Trump … by acknowledging that markets are not the great predictor that some scholars have claimed. Social scientists have long assumed that investors have a powerful interest in understanding how politics works. Certainly, since 2008 more and more financial actors have invested in political analysis.Actual political behavior can confuse them, though. Market participants are adept at identifying the economic pressures that could force politicians to act. Predicting how politicians will react to those pressures is where traders may fall down … Politicians have different incentives than market participants — a fact that sometimes escapes for-profit actors when they think about the world.