US markets: Donald Trump’s bull run
In the QE period, the stock market was dominated by “bond surrogate” stocks that pay a reliably high dividend yield and by shares that were economically defensive. Cyclical stocks were out of favour, as were financials. But in midsummer, these trends began to turn, and after the election these out-of-favour stocks received a huge boost.
David Donabedian, chief investment officer at Atlantic Trust, noted that as soon as the election results were clear, the Trump team put out a pro-growth economic message. “Coming right out of the block in the first 12 hours they hit all the right notes: the need to boost economic growth, the need for corporate tax reform, the importance of boosting infrastructure spending,” he says.
That turned a fear of a visceral sell-off into an environment where “animal spirits” were restored — and upward momentum took hold.
