the New York Bank towers, Donald trump’s election victory euphoria triggered, the shares of the largest U.S. institutions have been rising for months. Only the papers of the US investment Bank Goldman Sachs have in the meantime risen almost 40 percent.
For the party mood on Wall Street, there are two reasons. First of all, the bankers are hoping that Trump deregulated the industry strong. The future US President has announced to review the after the financial crisis of 2008 adopted measures, and may return. The money in houses could enter, so the hope of the bankers, in a more lax regulatory re-greater profits.
Secondly, the US will benefit banks by the humming trade with securities in the financial markets. The prospect of faster growth through a Trump announced economic stimulus program has boosted the US stock markets since the elections. The leading U.S. index, the Dow Jones climbed to a total of eleven new record highs and for the first time in its history, on the verge of the mark of 20,000 points.
These so-called Trump-Trades strengthened, the business of US banks. The profit of Goldman Sachs almost quadrupled in the fourth quarter of 2016 compared to the previous year. The Bank one line alone in the last three winter months, a huge gain of approximately $ 2.1 billion. Also, the investment Bank Morgan Stanley doubled its profit in the fourth quarter compared to the previous year.
But now, the doubt as to whether the current upward trend is sustainable is growing in the markets. “The current all-time highs make me nervous,” said Yousef Abbasi, market strategist at Jones Trading, the Wall Street Journal. And Jeremy Klein, capital market strategist at the asset Manager, FBN Securities, told CNBC: “financial stocks are in a far, far better than you actually are.” The rally for trump’s election victory was completely exaggerated.
in fact, the basis of the boom looks wobbly. As Trump described the Dollar as “strong”, were prompt, the prices of the banks, because of a possible weaker Dollar would hurt the U.S. economy sensitive. Investors would invest their money rather then abroad. On Tuesday, the US Bank index fell by about 3.4% and thus recorded the sharpest slump in six months. Trumps an unorthodox view on the own national currency made the bankers nervous.
The prices are currently very sensitive to any Expression of Trumps. “The uncertainty is high, because it is totally unclear how Trumps measures will have an overall,” says Tilmann Galler, capital market strategist at JP Morgan in Germany. Finally, hated Fund Manager of nothing so much as uncertainty and unclear statements.
Also on Tuesday published the “Global Fund Manager Survey”, a prestigious survey of American investors shows that investors are more cautious, and large risks for the financial sector Nearly 30 percent of all respondents fear, in the year 2017 trade wars. 24 percent see the danger that the American government is committing in the new year, big mistake.
The underlying concern: Trumps economic program could make the already good current U.S. economy to overheat. The Boom would drive up prices. Inflation is rising, so to counteract this, would have to increase by the US Central Bank, the Fed, the interest rates. Thus, the risk that the country slides into a recession.
The Fed is already preparing for a possible “Boom-Bust” scenario: you are ready to raise interest rates to cool the economy. Also, private investors are increasing their cash holdings, in order to safeguard against impending risks. According to the study, the cash stocks, the Fund Manager increased the average significantly. The investors want to be ready for the Trump-Boom.