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Trump Fails To Begin First Steps Toward Reforms

Published 03/29/2017, 06:18 AM
Updated 12/18/2019, 06:45 AM

Last week the US dollar continued falling. Stock prices also showed negative dynamics. However, no significant economic data were released from Monday to Thursday. The main negative factor for the US assets became investors’ doubts that the new US President Donald Trump would manage to quickly embark on economic reforms stimulating the US industrial production.

Meanwhile, such optimistic expectations pushed the S&P 500 stock index up by 11% since November 8, 2016, when Trump won the elections. An additional factor which contributed to the start of a downward correction in the US stock markets was the increase in the price to earnings ratio (P/E) of the S&P 500 to 18. This is markedly higher than its average level of 14 in the last 10 years. Theoretically, too high P/E may mean that stocks are overvalued.

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