$12 Trillion in Stock Gains Since Trump Was Elected

With the Dow Jones Industrial Average at 27,000, where it was in late July, the value of all American stocks was apprx. $36 trillion, according to the NASDAQ stock exchange. That means we’ve seen a gain of almost $12 trillion in American stocks since President Trump was elected.

On Election Day in 2016, when virtually everyone believed Hillary Clinton would win in a landslide, the Dow Jones Industrial Average stood at less than 17,900. As of late July, the Dow stood at more than 27,000. That, ladies and gentlemen, is a 50% return in stock values in just over two and a half years! Let that sink in.

Here’s another interesting and related stat: A 2017 Gallup poll found that more than half of American households (54%) own stocks directly or through a fund, and millions more own stocks through their company or union pension plans and IRAs.

It is widely estimated that there are over 100 million households in the US. Among those that are invested, the average household in America has gained over $10,000 in stock market wealth in the last two and a half years.

So, it’s not just the rich who are enjoying those returns, as the media would like us to believe.

No wonder the economy is in the longest expansion on record. No wonder unemployment is at a near 50-year low. No wonder there are 1.5 million more unfilled jobs than there are applicants. No wonder consumer confidence is sky-high.

No one is more surprised by this than those on the political Left and the mainstream media.

Let’s take the New York Times’ Nobel Prize winning economist Paul Krugman who is about as liberal as they get. Krugman famously declared the day after Trump won the election that the stock market would never recover from his presidency. This guy is consistently wrong!

The Washington Post wrote one month before the election that a “President Trump could destroy the world economy.” WAPO is one of the most liberal rags in the country.

I bring this up today because the 2020 election campaigns are now in full swing, and all the Democratic candidates tell us that the booming stock market only benefits the richest Americans. That is simply not true! The rising stock market benefits a broad swath of Americans.

Yes, the richest Americans own a lot of stock because they have the most money. But as noted above, over half of American households own stock in one form or another. So when you hear the politicians and the media claim that the stock market only benefits the rich, just ignore it.

Morgan Stanley Predicts Recession if Trump Tariffs Escalate

As you know, President Trump announced a new tariff of 10% on an additional $300 billion of imports from China. Together with the earlier 25% tariff on $250 billion of Chinese goods, that represents duties on just about everything China sells us. And Mr. Trump warned that the new tariffs could escalate to 25% just ahead if a trade deal can’t be reached with China.

On Monday of this week, economists at mega-bank Morgan Stanley predicted that the US economy will go into a recession if Trump’s new tariffs are hiked to 25% later this year. Morgan Stanley’s Chief Economist Chetan Ahya warned on Monday:

“As we view the risk of further escalation [in tariffs] as high, the risks to the global outlook are decidedly skewed to the downside. We would see the global economy entering recession in three quarters [of the new tariffs hitting 25%].”

He added that Trump’s latest round of tariffs will hit US consumers harder than the first round:

“About two-thirds of goods tariffed in this round are consumer goods, which could lead to a more pronounced impact on the US as compared to earlier tranches. Trade tensions have pushed corporate confidence and global growth to multi-year lows.”

Mr. Ahya also warned that further interest rate cuts by the Fed and the European Central Bank will not be enough to offset the negative effects – if Trump’s latest tariffs on China escalate to 25% later this year. He cautioned:

“Global central banks, in particular the Fed and ECB, will provide additional monetary policy support. But these measures, while helpful in containing downside risks, will not be enough to drive a recovery until trade policy uncertainty dissipates.”

While it is impossible to know what President Trump will do with regard to hiking tariffs on China even further, there is no doubt that if he hikes the latest tariffs to 25%, it will be bad for the global economy. And that includes us. Let’s hope he comes to his senses.

But I wouldn’t hold your breath!

One Response to $12 Trillion in Stock Gains Since Trump Was Elected

  1. So your choice is to back off the tariffs with China and let them keep screwing us and stealing our technology?

    If we don’t hold their feet to the fire NOW, when? After 2020 election if Trump wins again? Come on man!