Tags: Trump Administration | donald trump | stock market | rally | ubs kunkel

UBS Analyst Kunkel: Stock Rally Has Nothing to Do With Trump's Victory

Wednesday, 28 December 2016 06:01 AM

The market rally has nothing to do with Donald Trump's victory in the U.S. elections in November, said Maximilian Kunkel, cross-asset strategist, Ultra High Net Worth at UBS.

Kunkel explained that the rally has to do much more with the underlying growth we have seen in the earnings in the last few months in particular.

"If you look at the third-quarter growth in the United States, earnings growth was at 4 percent," he told CNBC. "The market had forecast reduction year-on-year by about 1 percent. That was the first time since the middle of 2015 that earnings were actually accelerating. We think the earnings growth is going to accelerate into 2017. That's really what is driving the markets."

Trump tweeted positive energy Monday evening, trumpeting the post-election success of the U.S. stock market and the public's aggressive holiday spending this season as reasons for "hope" in what had been a "gloomy" world.

When referring to Christmas spending exceeding $1 trillion, Trump was likely referencing a Forbes report from last week. The spending estimate would represent a 3.6- to 4.0-percent increase from 2015, according to Forbes, citing a Deloitte University Press survey. 

Trump's Christmas tweet alluded to similar hope for a successful transition and new administration, repeating "very" four times before "Happy New Year."

Americans alone spent 8 percent more than in 2015, per Forbes, citing the American Express Spending & Saving Tracker. 

While the final holiday retail sales data is still pending, a Deloitte University Press report in September projected that holiday sales this year will exceed $1 trillion, reflecting a 3.6 percent to 4 percent increase.

The trillion dollar figure cited by Trump was not sourced in the tweet. CNBC has asked the campaign via email for the source of the claim, CNBC.com reported.

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The market rally has nothing to do with Donald Trump's victory in the U.S. elections in November, said Maximilian Kunkel, cross-asset strategist, Ultra High Net Worth at UBS.
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2016-01-28
Wednesday, 28 December 2016 06:01 AM
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