The following is an excerpt from Sue Chang | February 11, 2017 | Marketwatch.com |
The juggernaut of optimism unleashed by President Donald Trump’s presidency will continue to steamroll its way through the market, paving the way for stocks to carve out new highs and keep hungry bears at bay.
Wall Street is fairly upbeat on the positive impact of lower taxes and regulatory reforms promised by Trump, even if details remain murky. But despite the lack of clarity, enthusiasm for the president’s agenda has not waned with at least one prominent strategist suggesting that the so-called Trump rally is only beginning.
Binky Chadha, chief strategist at Deutsche Bank, predicted that stocks have much further to go on the back of proposed tax revisions with the S&P 500 poised to hit 2,600 by the end of the year.
He argues that the surge in stock prices after Nov. 8 is typical of the market’s behavior following a tight race, playing down the commonly held notion that expectations of pro-business policies had fueled much of the market’s gains in the wake of the U.S. presidential election.
“The case for U.S. equities is strong,” Chadha wrote in a report. “A V-shaped recovery in gross domestic product and earnings growth, unfolding for a year now, has further to go.”
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