The trade-weighted US dollar is roughly where it was on November 7th, 2016, inflation expectations are only 10 basis points higher than they were before the elections, the 2017 consensus forecast for US GDP was 2.1%, today the consensus is 2.2%. And after its post-election meteoric ascent, the 10-year rate is only 40 basis points higher than it was in early November—of which most can be attributed to the push factor from the Fed’s tightening trajectory—which, in turn, would have been exactly the same if Hillary was running the show.
Granted the S&P 500 is up by 13% since the election—seemingly immune to the reversal of the Trump trend. One explanation here is that markets learned to normalize the abnormal, and what in the past would have spooked investors, today is met with a yawn. That’s a scary thought. We don’t buy that argument. The reason is that the S&P 500 is not the only market that is up. The MSCI global index is up by just over 13%, the Nikkei by close to 15% and the DAX by 20%. So something else is happening here.