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Trump Seems to Have the Last Laugh as Markets Reach Record Highs

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Markets reach record highs

US markets have been strong this year, and both the S&P 500 (SPY) and NASDAQ Composite (QQQ) hit new closing highs yesterday. The upward price action is a welcome break for investors after the fourth-quarter sell-off. Apple (AAPL), which was Berkshire Hathaway’s (BRK-B) biggest holding at the end of the fourth quarter, also saw its market capitalization slump below $700 billion in Q4. Apple’s market capitalization is within striking distance of a $1 trillion market capitalization now.

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Fourth-quarter sell-off

Last year, several observers were preaching doom and gloom amid the broader-market sell-off. Brokerages’ pessimism over the US and the global economies added fuel to fire as fear became the dominant theme in markets. Even this year’s recovery didn’t impress some, and Goldman Sachs said it expects markets to be range-bound this year. The comments were made in February, after the Dow Jones (DIA) wrapped up its best January in 30 years.

Meanwhile, US President Donald Trump sounded optimistic about US markets last year at the height of the sell-off. Speaking with reporters on December 25, Trump said, “We have companies — the greatest in the world, and they’re doing really well.” He also added, “So I think it’s a tremendous opportunity to buy. Really a great opportunity to buy.” Back then, David Tepper and Jim Paulsen also saw a buying opportunity.

Strong economic data, optimism over US-China trade talks, and the Fed’s dovish stance have been among the factors supporting markets this year.

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