- UK market hits twelve consecutive days of record highs
- Sterling dips ahead of PM May’s Brexit speech
- Dollar retreats following Trump press conference
- Chinese trade data shows fall in exports
- US small business confidence soars
James Klempster (CFA) of Momentum Global Investment Management shares his view:
As Barack Obama’s presidency began in January 2009 – deep in the market sell-off following the global financial crisis – it was reasonable to presume that his job was at best thankless and at worst almost impossible. Yet, in many ways history may well tell us that his job was simple in comparison to that of his successor. Obama rode to victory on a tide of optimism and expectation that set him apart starkly from George W. Bush. Obama’s youth and eloquence stood him apart from the man he replaced. During that time tensions and the risk of policy missteps were high, but equally expectations were low due to the volume of bad news.
In fact, Obama’s legacy has benefitted from the fact that he took over with the stock market in a cyclical trough. Conversely, Trump will take the reins of an economy that, while not firing on all cylinders, has recovered a long way since the dark days of 2008 and 2009. Furthermore, the stock market is a long way ahead of eight years ago, with a total return of 235% from the S&P 500 over the period. Adding to the challenge, interest rates are at historical lows and government borrowing is at record highs. The consumer is in reasonable shape and unemployment is low and this is starting to feed into wage growth inflation which reduces policy makers’ room for error.