By Agence France-Presse
The bronze sculpture of a bull that stands near the New York Stock Exchange serves as a symbol of Wall Street’s power perhaps this year more than ever.
Since President Donald Trump took office a year ago, the principal US stock indexes have gained by leaps and bounds, hitting a record string of records.
“I have not seen such enthusiasm on Wall Street since Ronald Reagan,” said Peter Cardillo of First Standard Financial, who has seen nine US presidents come and go since 1971, when he started working at the heart of global finance.
In 2017, the S&P 500 soared 19.4 percent while the blue-chip Dow Jones Industrial Average gained 25 percent and the tech-heavy Nasdaq added 28.3 percent — the strongest performances since 2013.
Only two other presidents, the Democrats Barack Obama and Franklin Roosevelt, saw higher gains in the broad-based S&P 500 during their first years in office.
Analysts say euphoria over the tax overhaul that slashed corporate rates, which Trump signed last month, fed Wall Street’s buying frenzy, along with rising prosperity and job creation after a decade of slow economic recovery.
“We got a very generous tax cut and of course it favors corporate America and so basically that means that we’re going to see capital investments rise at a hefty pace, and that could create more jobs,” Cardillo said.
After the tax package was enacted in December, some companies wasted no time in announcing pay raises and rosy earnings — including automaker Fiat Chrysler, commercial banking giant Wells Fargo and global retailer Walmart.
But many companies have said the windfall will go to increased payments to shareholders and share buybacks rather than more investments and job creation.
In addition to the Christmas present of tax cuts, Trump’s pro-business attitude has comforted investors.
‘Not related to Trump’
“Around him, the people in charge of the American economy come directly from Wall Street and Goldman Sachs,” said Gregori Volokhine, president of Meeschaert Financial Services.
That includes senior White House economic advisor Gary Cohn and Treasury Secretary Steven Mnuchin, among others.
“It’s a team of insiders. Donald Trump lets things happen and what happens is market friendly.”
Those welcome signals from the White House come against the backdrop of steady economic expansion, with US GDP growing every year since 2010, fuelling the good mood on Wall Street.
Trump and his team are seen as having given the economy a “boost,” Cardillo said, noting that “the US economy and job creation were already robust before him.”
But the healthy US outlook is also part of a bigger, global picture.
The International Monetary Fund estimates the world economy will grow by 3.7 percent this year after expanding by 3.6 percent in 2017, further increasing demand for US exports.
And as Volokhine noted, “last year, the most successful financial markets in the world were Argentina, Nigeria and Turkey.
“It was obviously not related to Donald Trump.”
Underscoring the impact of global conditions on the US economy, he noted that the 55 percent of American companies on the S&P 500 that are export-dependent have become even more competitive due to the weakening of the US dollar, which fell nearly 10 percent last year.