Bullish Canaccord Genuity equity strategist Tony Dwyer said the sharp market rallies seen since Donald Trump was elected as US president have nothing to do with politics.
He said the meagre policy reforms Trump has been able to implement in his first months as president are proof the US equity rally “isn’t about Donald Trump”.
In terms of successfully pushing through policies in his first 100 days Trump is already seen as among the worst-performing ever US presidents.
But in terms of the first 100 days of stock market performance, he finds himself among the top ranks.
“The investment environment is never about politics. It’s always about the fundamentals that drive it,” said Dwyer.
Dwyer views making investment decisions based on potential political outcomes as a pointless exercise because, as America’s 45th commander in chief has demonstrated, allegiances change, campaign promises are broken and it takes a while to put money to work.
“If you’re trying to trade a portfolio on political background that’s insane. You need to have a fundamental basis,” he said.
And right now, Dwyer said he believes the fundamentals look good.
The real federal funds target rate, or the difference between the federal funds rate and the inflation rate, currently stands at -1.13%. Since 1954, the US has not entered a recession without this figure surging above the 3% mark, he said.
