US Economic and Stock Market Surge
The 2024 stock market bull run is set to run faster and higher beginning next spring and extending for the next 5 years under the now-forming government of President Trump.
After the initial irrational exuberance, markets are a little flat this week as investors take some profits, and ponder that President Trump won’t be in office for another two months. Its entirely understandable given the season and the dramatic change we’re going through. Calm investors just have to sit tight and wait for the Xmas surge or the early spring bull market.
Unfortunately, it’s giving market saboteurs and Democrat politicians time to sew doubt about the new government forming. Two of those tactics suggest inflation might happen in 2025 due to Trump tariffs and that interest rates might stay high for many years.
Trump Looking to Force Interest Rates Down
Despite the fact inflation has been under control for 14 months, the FED has barely brought rates down. It’s clearly excessive and reminds us that the FED is a problem for the US economy and spirit. The sole purpose of the agency is suppress economic expansion and take money out of the private sector where it’s desperately needed. It’s small business that’s been is crippled for years by high interest rates, and they create most jobs in America. The rebuilding of the country centers on SMB revitalization therefore lower interest rates must be mandated by the new government. Replacing the FED would be extremely good for business.
The FED belief in continuous higher interest rates is in direct contrast to where President Trump wants to see them. He wants cheap money to fuel the American economic renaissance. This is why he might get rid of the FED in order to cut costs and ensure the financial markets work for the US economy. In J Powell’s speech this week, he said they won’t be eager to cut rates. So, letting the FED dictate rates like this could be a threat to the Trump’s entire administration and strategy. The FED did the same thing back in 2016 when Trump took office. Given the FED botched their response to the pandemic and overreacted to control the inflation that resulted, they’re not seen as credible by anyone outside the Democrat party or Democrat media channels.
Might Be A Market Lull until March
Tom Lee’s forecast as you’ll remember has called for a big rally this year-end and next year, but he did mention three might be a setback during the “dead zone” in late November before the new policies will take effect. The next 3 months might be dicey, but according to Tom, it’s looking good. Given the Republicans are in full control, the Democrat’s plans to disrupt and delay might not gain much traction. There will be events of course.
Given what we’ve all been through, it’s taking a little time for American’s enthusiasm and confidence to grow. For small businesses and for every American citizen, the new Trump agenda is offering relief in the form of lower energy costs, lower taxes, provisions for more housing, and an expulsion of illegal migrants.
Add on lower interest rates (which may not be forthcoming from the FED), and we have an economy that will boom and draw investment from around the world. In fact, the US might be the only investible economy at present. China was next but it’s trillion dollar stimulus has failed as the end of globalism, trade favoritism, and US-fueled import spending ends.
The rise of Bitcoin and the US dollar of recent shows strong investor confidence in investing in the US, free of regulations, for the highest returns in the world. Their optimism will pay off in the years ahead.
Sebastian Page of T Rowe Price in this YouTube interview feels investors have been factoring in deregulation, lower taxes, and inflation. He mentioned Trump’s withdrawal of excessive taxation as a big factor. He mentions that all indicators are positive except Gold which rose in price (+$500 in last 4 months). However, Gold is falling now and we wonder if it will give it up completely in late January when the new President begins passing executive orders and other legislation.
President Trump has promised to cut energy costs in half, which would have a major impact on deflation and cutting business costs, which leaves more money in small business hands and consumers. And small businesses may find it easier to find credit to get their companies moving in 2025.
The forecast is bright for real estate, travel, software and manufacturers in the US, and a boom time for US stocks. Investing in the United States isn’t just patriotic, it’s likely the only path to investment profitability.
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