With the recent election of Donald Trump, investors from all over the world are increasing investments based upon Trumps promises. On the election campaign Trump has promised the american people that he would cut taxes, have fewer regulations on investments and cut federal governments spending. Investors are betting that Trump will be able to recharge the American economy.
For the first time the Dow Jones closed above 19000, with the S&P 500 for closing higher than it has since 2011. The late surge in the Dow, S&P 500 and NASDAQ have all been correlated to the election of Donald Trump. Leading up to the election the Dow was on track to post on of the worst years in history. But with the recent growth of 3.4 % it is expected to end at a 8.7% growth. Which would be the largest growth in history.
Since Election Day companies like Goldman Sachs and several other large manufacturing companies have invested millions of dollars in hopes of Trump following through with his promises. The concerning part is that in many instances the rush to invest money and the underpins are rise in the currency of a nation has ended in havoc. Raising the value of the dollar against foreign currencies makes it harder for the government and corporations to pay off their USD-denominated debts.
For this reason, many economists are concerned and have warned against investing liberally. Economist believe that a “Trump-inspired revival of the United States economy is a spate of calamities in emerging markets.” As Trump prepares to enter office in the coming months the markets are likely to grow even more. What do you think will happen once he enters office? Will the economy that Trump has promised actually appear?