- President Donald Trump said in an interview with CNBC on Thursday that the stock market would have dropped 50% had Hillary Clinton won the presidential election.
- Based on a Business Insider study, Trump has only been periodically responsible for equity gains since November 2016, and positive conditions existed before he even took office.
- It remains to be seen whether Trump will continue staking claim to the stock market’s performance should conditions weaken.
The latest example came on Thursday, during an interview with CNBC at the World Economic Forum in Davos, Switzerland. In a twist on his traditional narrative, Trump chose to discredit his election opponent Hillary Clinton, rather than explain his role in the market’s ascendance.
“Had the Democrat won – the stock market is up almost 50 per cent since my election – had the Democrat won, I believe you would have been down 50,” he said. “That’s the direction we were headed.”
Back in October, Business Insider graded Trump’s claims, and found that while he’s been periodically responsible for stock strength, he is by no means the only driver. To be fair, that conclusion has shifted more in Trump’s favour since the passage of the GOP tax bill, which strategists across Wall Street have identified as the single biggest bullish driver for more gains in 2018.
Still, there were plenty of positive drivers present at the time of the 2016 election, including synchronised global growth, a US profit expansion recovery, and continued monetary accommodation from central banks. While it’s impossible to know for sure, it’s likely that those factors would have similarly aided Clinton had she won.
It remains to be seen if Trump will continue laying claim to the stock market’s performance under conditions that aren’t quite so rosy. It’s entirely possible that he’s trying accumulate the maximum possible credit now, while the market is still firing on all cylinders.
In the end, stocks aren’t going to go up forever, especially with the almost nine-year bull market already the second-longest on record. It will be interesting to see if Trump wants to be associated with it at that point. Stay tuned.