Voters Have Spoken, Now Markets Speak: Part II

Read Part I: Voters Have Spoken, Now Markets Speak

Just because it's so doesn't make it right. 

This morning's premarket message was pretty much on the mark as the US stock market subsequently rallied. The question becomes: Given all the uncertainty a Trump presidency brings, why the rally? To help explain one of the key reasons, the following chart from Moody's should be enlightening. 

Published before the yesterday's election results, what you see are the projected economic impacts on US GDP should Mr. Trump's economic policies be adopted (which they unquestionably will be). What is important to note in the chart is the projected short-term bump to GDP for next year, which, when coupled with an anticipated rise in corporate earnings for 2017 (+11.9% operating earnings for the S&P 500), helps justify an already overvalued market maintaining - and possibly expanding - its condition. (Given the short-term nature of many financial markets' participants, the subsequent years' forecasts are a little too far out there to be of interest to many investment professionals.)