Why the Wall Street Trump fear must

are usually pre-election years such as 2019, the best stock market years on Wall Street. But this Time, everything could be different. Because the acting President will listen to the name Donald Trump.

By Angela Göpfert, boerse.ARD.de

especially in the first half of the year, the Dow Jones moves into pre-election years

according to the statistics, the Wall Street celebrate the bankers now. For the years following Midterm Elections have a legendary reputation in the stock market. According to the U.S. presidential cycle, pre-election years are the strongest stock market years. On average, the Dow Jones in pre-election years increase by almost twelve percent.

Impressive hit ratio

of The US presidential cycle is one of the most important long-term cycles in the stock market at all. For nearly 120 years, the Dow Jones is following this pattern with impressive precision and a high hit rate.

"Since 1986, only six pre-election years were negative, most recently and for the first time since the end of the Second world war the year 2015," said Robert Rethfeld of "riding the Wave-Invest", a proven expert in seasonal effects.

Fundamentals

pre-election years are the best years of the presidential cycle

all of This is of course not a coincidence, but fundamentally well justified. As a newly elected President usually uses the first two years of his term, unpopular decisions, such as spending cuts to enforce. These concerns then on the stock exchange first of all for a bad mood and falling prices, especially in the post-election year.

Shortly before the election of the President, however, the voters in the scene, the chances of his re-election, respectively, to increase the re-election of his party. He puts all the levers in motion in order to stimulate the economy and spread with hands full of choice gifts. This is reflected in turn in rising stock market prices in the pre-election year.

everything Is different this Time?

However, U.S. President Donald Trump has been used in the first two years of the American company by the tax reform, massive arms, and the stock prices supported. A new fiscal policy Turbo in 2019, investors hope, however, in vain. As President, Trump has lost his majority in the house of representatives.

More course has fired about Dow Jones (indication)

Trump his powder already. In addition, the US Central Bank is slowing due to the continued withdrawal of Liquidity of 50 billion dollars per month. "This Policy is changed, then the pre-election year of 2019 and the year 2020 should be below average," predicts Rethfeld.

the fear of The great crisis of confidence

However, the lack of fiscal stimulus the economy is certainly not the only reason why investors have to fear the influence of Trumps on the Wall Street in the new year. In the Bank towers, the fear of intra-party ruled weakened and, therefore, in its Foreign and economic policy, the unberechenbareren President.

President, Donald Trump: he is writing a letter of resignation?

of Particular concern in this regard is turning faster and faster the end of personal carousel in the White house. At the end of the year, occurred within a few weeks, chief John Kelly back to the bar, justice Minister Jeff Sessions and Secretary of defense of Jim Mattis. The four-star General, Mattis was considered by many observers as "the last of the adults" in the government's Trump.

these events have not, as yet, no death spiral of falling confidence in the President - similar to a Bank Run triggered. However, what has prevented such a death spiral yet? Exactly, the thriving economy and the resulting support Trumps in many Parts of the U.S. population.

Weak economy, weak stock markets, weak President

The trade dispute US-China is a huge burden for the global economy

However, this support could crumble 2019 rapidly. The large banking houses expect all of them at least with an economic downturn in the United States, some even with a recession. The ongoing trade dispute with the USA and China is considered to be one of the triggers.

And so it could actually be President Trump, which puts this bull market, the final death knell - and at the same time, his own grave digging. Because falling equity markets would deny to Trump the shaky Foundation of his presidency.

source: boerse.ard.de

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