If traders should awaken on January 3 in an inexplicably downbeat mood, the new year could begin with a thud. It wouldn’t be the first time a jubilant December gave way to a sullen January. Whatever happens, there’s no reason to think the stock market will weaken significantly between now and December 30, the final trading day of 2016. Moreover, as the chart I’ve included with the latest DJIA tout makes clear (see below), there is good reason to believe that the strong buying we’ve seen since November will continue. Much of it is surely attributable to the prospect of a deregulated business environment and lower taxes that President-elect Trump has promised. There will be doubts about whether these changes will suffice to overcome the drag of an economy that has been mired in 2% growth for the last decade. But if the hope and change that Obama campaigned on turned out to be a bust, the prospect of constructive change seems real enough already, given Trump’s activist cabinet appointments and his determination to do away with Obamacare, the biggest tax increase ever levied on the middle class. Regardless, many Americans appears braced for the worst. If they are wrong, will they acknowledge it by becoming part of the solution? That would be something of a miracle. Who knows what the economy is capable of with everyone pulling together?
