The U.S. Stock Market and the 2018 Elections

When Donald Trump was elected President in November, 2016, the stock market began and continued to rise.  2017 was a good year for stocks and the market closed the 2017 year with an increase of over 17%.

The question that everyone wants to know is: ” Where will the 2018 market close? ” The last trading day in June, 2018, marked the first half of the year. Stocks in the first half of 2018 ended the mid term with no gain and just a fractional loss. Why is 2018 so different from 2017?

History has shown that U.S. stock markets strongly dislike two things. They are: 1) Double digit inflation, and 2) interference with free trade.  President Trump has placed very reasonable tariffs in certain areas in order to promote fair trade between the U.S. and other countries.

So, where will the markets close on the last trading day in December, 2018?  It all depends on the October surprises that President Trump has figured out. The U.S. House and over a third of the U.S.Senate are up for election in November, 2018. The media is telling us that the Democrat Party will take control of the House and the Senate. Remember, this is mostly the same media group that stated that Hillary Clinton would win in November, 2016!  Will they get it right in 2018?

The answer largely depends on the Democrat Party’s ability to depict Trump as an opponent of free trade.  President Trump knows this and his October surprise will work something like this. President Trump and Country A will reach an agreement that will reduce tariffs and promote free and fair trade between these two countries.  That will promote confidence in Mr. Trump’s policies.  When this same paradigm is repeated with Country B and Country C, the market will rise along with Republican popularity. This is the October surprise. projects that the U.S. stock market will close 2018 with an 11.8% gain. The 2018 elections will also be a function of President Trump’s October surprise.

R. Van Conoley  ( Editor’s Note: The party in power  almost always loses mid-term elections. President Trump wants to rewrite history again. )

Editor’s Note 2- ( The U.S.-China trade situation is complex and will not be resolved in 2018. Hence, China will not be part of Trump’s October surprise. )

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