More and more Wall Street business leaders and strategists are showing concern about what President Donald Trump’s protectionist policies and unpredictable nature of markets and the economy can do.
But we all know that action speaks louder than words. What investors really do is in stark contrast to what people say. The Dow, S&P 500 and Nasdaq hit all-time highs on Friday.
And the Russell 2000, a small business stock index that tends to run most of its business in the U.S., is now just a few points off its all-time high last December in the wake of Trump’s market euphoria. .
Moreover, the VIX (, a measure of volatility known as the Wall Street scare measure, is also down about 25% this year. If investors were afraid of Trump, the VIX would have to be much higher. )
I CNNMoney’s own index of fear and greed, which takes into account the VIX and six other measures of investor sentiment, shows signs of Greed and is not far from Greed Extreme levels.
Of course, it seems that Trump still can’t help himself tweet about things that, let’s be honest, won’t do anything to help the economy, even though Nordstrom investors are richer even though Trump has attacked them for having made the mark of his daughter Ivanka.
But to give credit where it should come from, it seems that the main reason why the actions have taken off recently is because Trump has promised to present a “phenomenal” fiscal plan soon.
Related: Rare Rasta for U.S. Stocks: 1% Long Immersion Length
Trump also pledged to invest more in infrastructure when he met Thursday with the airline’s CEOs.
This is what the market wants to hear.
“We still expect tax incentives, lower taxes and less regulation,” said Matt Lockridge, manager of the Westwood Small Cap Value Fund. “The calendar is the big question, but it’s getting closer.”
Lockridge believes that many companies that generate most of their revenue from America should benefit if Trump’s stimulus ends up boosting the economy.
He enjoys stocks in various industries, such as the cinema owner Masco (, snack food company )J&J ( and aerospace equipment company )Kaman (. )
Another money manager said he is still in excess of small U.S. stocks that could get a boost from Trump’s policies.
Related: Wall Street has a powerful seat at Trump’s table
Barry James, president and CEO of James Investment Research, said he bought the directory iShares Russell 2000 ETF ( the day after the election, as he is confident that Trump’s stimulus plan will drive the growth of U.S. small businesses. )
“When Trump first said America, I really think that’s what he means,” said James, who added that he thinks of Internet phone service. Vonatge (, retailer rented to own )Aaron’s ( and discount chain )Lots ( All could thrive if Trump’s proposals pass. )
But there is another reason why U.S. markets are almost maximum. Despite the uncertainty in Washington, the United States is still considered a parable of relative stability compared to other parts of the world.
Europe’s economy remains a great comfort thanks to Brexit, the rise of populism in France provoking worries about the so-called Frexit and more worries about the problem that never seems to disappear: Greece’s debt is bothered.
The Japanese economy remains stagnant. We are talking about more than a decade lost now. It is plural. And the Chinese economy is also slowing down.
Bill Gross, the bond fund manager, has often joked as America as what Johnny Cash and Kris Kristofferson sang in “Sunday Morning Coming Down,” the “cleanest dirty shirt.”
To that end, analysts at bond firm Fitch wrote in a report on Friday that “elements of President Trump’s economic agenda would be positive for growth,” but added that “the current balance of risks points to to a less beneficial overall result “.
Of course, there are two sides to this coin. Trump’s bombing could assault him again.
Related: Oreo make is concerned about rising populism
Its continuity for companies that disagree with Twitter could dampen investor confidence.
And while the U.S. judicial system has now lifted its travel ban on immigrants from seven predominantly Muslim countries, the president has pledged to fight for their reinstatement.
Even if he loses this battle, it is still clear that Trump is serious about going further inland, with border-adjusted tariff and tax plans that could ignite trade wars with Mexico, China and Japan. This could hurt large US multinationals and lead to job cuts.
But investors still seem to believe / expect that the merits of Trump’s pro-growth stimulus plans and tax cuts outweigh the impact of isolationism. We hope they are right.
Investors can have their noses, close their eyes and put cotton on their ears to drown the president. But they keep buying stock.
CNNMoney (New York) First published on February 10, 2017: 11:55 ET