Observations and Perspectives: Is the Sugar High Wearing Off?
Anticipation of lower taxes and higher infrastructure spending initially pushed investor enthusiasm and stock prices higher for several weeks following the election of Donald Trump as the 45th President of the United States. At the same time, a sea of change from central bank dominated markets to a focus on fiscal policy sparked inflationary fears, a stronger dollar prompted a melt-up in interest rates. As the Dow inches toward the historic level of 20,000, the sharp runs in stocks have begun to consolidate while rates have retreated. The sugar high is wearing off.