Since the election of Donald Trump as President of the United States, the markets have continued to climb higher and higher. Initially, it was believed that a Trump presidency could potentially cause the markets to crash. This couldn’t have been further from the truth. Of course, it is also important to realize that the Trump administration is not solely responsible for the health of the markets. During the first quarter of the year, several major factors have helped to support the market’s climb. Below, you will learn more about these factors and their influence on the markets.
The French Election
It is downright imperative to realize that the upcoming French election and the events leading up to it have played heavily on American and global markets. During the leadup to the election, markets experience turmoil and volatility as Marine Le Pen led the polls. However, a shift has begun to take place and it has substantially helped global markets. The Centralist candidate Emmanuel Macron managed to secure a higher vote total than Le Pen during the first stage of the election process. This has helped to dim the fire burning for Le Pen and it has subsequently convinced analysts that a Le Pen president is unlikely.
Now that the European Union will likely remain intact, markets are rejoicing. While there is still some concern that Marine Le Pen could pull off the upset, Emmanuel Macron has proven to be a shining light for stocks.
Excellent Earning Reports
There are many political factors that can take the markets higher or lower. However, at its heart and soul, the markets are primarily driven by the economy and the performance of companies. Several companies have experienced tumultuous quarters, but you wouldn’t know it by looking at the recently released earning reports. In fact, recent earnings have helped to fuel the market’s rise, while simultaneously pushing the NASDAQ over the 6,000 point threshold. The kickoff was led by McDonald’s and Caterpillar. While the 6,000-point milestone might not be significant, it will undoubtedly give consumers and investors more confidence and this could result in stocks climbing even higher.
It is also important to take a look at the latest Nasdaq penny stocks. While they’re low at this point in time, they could easily climb alongside their bigger counterparts.
It has been nearly impossible for the Trump administration to make it through an entire week without some type of political setback. This has led to increased volatility here and there. Nevertheless, investors are well aware that the markets could climber higher should Trump be able to get some of his agenda passed over the next few months. After healthcare fell through the cracks, the Trump administration quickly shifted their focus to tax reform. Now, the government has put out snippets of information about the tax reform plan and corporations are hopeful.
President Trump hopes to be able to decrease the corporate tax rate to just fifteen percent. This has definitely given hope to investors. However, it is important to remain skeptical at this point. Another setback for the administration could send the markets south in a hurry.