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Yale's Shiller: Trump Effect Keeping Bull Stock Market Alive

(Paulus Rusyanto/Dreamstime)

By    |   Wednesday, 30 May 2018 11:23 AM

Nobel Prize-winning economist Robert Shiller says that President Donald Trump's pro-business influence is keeping the bull run in the stock market alive.

"There is a sort of optimism about the markets under Trump, and that's continuing. I don't see a reason for it about to change," the Yale economics professor recently told CNBC.

"There's something about how the world is reacting to the president. Something about his self-confidence which is gradually lifting our spirits," said Shiller, who was awarded the Nobel Prize in Economic Sciences with Eugene Fama and Lars Peter Hansen in 2013.

However, Shiller was cautious about just how long the market rally would last.

"We've seen an overpriced stock market. We've seen concerns about that for years now," said Shiller, who's been arguing valuations are extremely expensive.

As a result, Shiller advised investors to diversify abroad.

"If you have been overexposed to the United States in your portfolio, this is a time to reconsider that," said Shiller, who helped develop the widely-followed S&P/Case-Shiller Home Price Indices.

"Not to pull out, but to balance things ... Europe is cheaper than the U.S.," said Shiller, who developed the cyclically adjusted price-earnings (CAPE) ratio market valuation measure, which is calculated using price divided by the index's average historical 10-year earnings, adjusted for inflation.

Meanwhile, other economic gurus depict a much more gloomy future for the global economy.

A surging dollar and a capital flight from emerging markets may lead to another “major” financial crisis, investor George Soros said, warning the European Union that it’s facing an imminent existential threat.

The “termination” of the nuclear deal with Iran and the “destruction” of the transatlantic alliance between the EU and the U.S. are “bound to have a negative effect on the European economy and cause other dislocations,” including a devaluing of emerging-market currencies, Soros said in a speech in Paris on Tuesday, Bloomberg reported.

“We may be heading for another major financial crisis.”

For his part, Trump has taken to Twitter to tout the economic accomplishments of his administration.

"Best economy in decades, lowest unemployment numbers for Blacks and Hispanics EVER (& women in 18years), rebuilding our Military and so much more. Nice!" he recently tweeted.

(Newsmax wires services contributed to this report).

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Nobel Prize-winning economist Robert Shiller says that President Donald Trump's pro-business influence is keeping the bull run in the stock market alive.
yale, shiller, trump, bull, stock, market
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2018-23-30
Wednesday, 30 May 2018 11:23 AM
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