Yes, the stock market rally is over. But don't blame it on Trump.
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After Election Day, the stock market priced in four years of a Donald TrumpDonald John TrumpHarris bashes Kavanaugh's 'sham' nomination process, calls for his impeachment after sexual misconduct allegation Celebrating 'Hispanic Heritage Month' in the Age of Trump Let's not play Charlie Brown to Iran's Lucy MORE presidency in less than four months of trading. On Nov. 7, the Dow Jones Industrial Average briefly fell below 18,000 intraday. By March 2, the benchmark index had topped 21,100 — an impressive 17 percent gain.

But ever since the beginning of March, policy missteps and continued scandals have started to weigh on the Trump administration — and the rally. The Dow just posted its longest losing streak in six years as the mood in both Washington and on Wall Street has soured.


So it’s worth asking: Is this the end of the Trump rally? The short answer, in my opinion as a stock market analyst, is “yes.” But the longer answer is that it was never Trump’s rally to begin with, and it may not really be his fault that stocks are in store for a difficult 2017, either. Investors have been fretting about the risk of declines for some time, and the recent narrative of a Republican Congress that can’t deliver may simply be a convenient excuse for an overdue selloff.


Consider for starters that we are in the midst of an eight-year run for stocks. That is not to say that we haven’t had a few bumps along the way, of course, such as a roughly 10 percent decline for the major indices in late summer 2015 on global growth concerns. But as it has so many times since the Great Recession, the stock market stabilized quickly and resumed its run higher.

The technical definition most market-watchers use for a “bull market,” or a favorable environment for stocks, is a period where major indices like the Dow do not suffer a top-to-bottom decline of more than 20 percent. And believe it or not, after the stock market bottomed in March 2009, we haven’t seen a decline that tops that threshold.

That makes this eight-year run the second-longest bull market in history, topped only by a nine-year run for the market from late 1990 to early 2000 before the dot-com bubble burst. It also is one of the top three in terms of overall performance, with the Dow Jones up about 230 percent since the 2009 lows.

But no rally has ever hit the 10-year mark without a 20 percent decline. And while the market has moved steadily higher, corporate profits haven’t quite kept pace and several financial metrics indicate many public companies enjoy stock prices that are generally too expensive when compared with actual revenue and profit forecasts.

Just in case you think this is just another warning that a decline in stocks is overdue, it’s important to also acknowledge that low interest rates have been a huge driver of stocks in recent years. After all, with CDs at your local bank yielding less than 1 percent, and Treasury bonds yielding roughly 2.5 percent, stocks really were the only place to put your money if you wanted growth. But now, the Federal Reserve has raised rates twice in four months. And more than a few investors may be interested in allocating money away from stocks and back into bonds.

There is plenty of bad economic news right now if you want to blame Trump. He promised 4 percent GDP growth, but the Atlanta branch of the Federal Reserve cut its first-quarter growth estimate to a meager 1.8 percent. He promised to repeal ObamaCare and failed embarrassingly, calling into doubt other pro-business promises that include less regulation and changes to the tax code. He’s up to his neck in Russia scandals and spends an inordinate time playing golf instead of getting real policies in place.

But these are just excuses for headline writers, to be honest. It’s much more clicky to write a headline like “Failed ObamaCare vote causes stocks to crash” the same way it’s more clicky to write a headline like “Stocks rally on upbeat jobs numbers.” But they are both gross oversimplifications.

The reality is we are in a very challenging period for the global economy, with meager growth forecasts in the developed world and China struggling to build on previous economic successes. We’re also in a kind of no-man’s land for investors, as many feel the stock market’s rally is ripe for a fall, and many are eyeing a rotation back into the bond market.

To borrow from Trump, nobody knew that the stock market could be so complicated. Sadly, if the 2016 election taught us anything, it’s that American voters and consumers aren’t all that interested in nuance or complex narratives. Heck, most of them aren’t even interested in facts or reality, and simply want someone to validate their existing worldview.

As such, I fully expect an avalanche of punchy soundbites on talk radio and Twitter that blame Trump if and when stocks continue to decline over the coming months. But the honest truth is, the current rally has gone on for eight years thanks to a host of issues.

And it will end — most likely very soon — for another host of issues much bigger than Trump. That may be cold comfort for some Republicans come the 2018 midterms, or Trump himself when he faces re-election in four years, however.

Jeff Reeves is a stock analyst and executive editor of His commentary has also appeared on CNBC, Fox Business, USA Today and the Wall Street Journal network.

The views expressed by contributors are their own and are not the views of The Hill.