Five obstacles to economic growth and stock market gains are down but we have one to go and yes, it’s Donald Trump. If we can get over this hump — the Trump hump — maybe that breakout for stocks predicted by CMC’s Michael McCarthy on my radio podcast last Monday will come to pass.
Those 5 barriers to taking stocks higher were:
- The Fed wanting to raise rates.
- APRA and its determination to reduce bank lending.
- The Royal Commission and its smashing of bank’s profitability via the cost of remedies and the killing off of lines of revenue, such as financial planning.
- The negative vibe an election always brings to business spending and hiring, as well consumer outlays.
- The threat of Labor’s Bill Shorten, with his policies that threatened small business with wage rises, property investors who faced negative gearing changes and investors generally who were facing a halving of the capital gains tax discount.
I did tell you I expected a Bill win and a short-term boom as investors chased property and stocks before January 1 (the proposed start date for these policies) — but I feared the cliff that investments could’ve fallen over after day one of 2020.