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Attention Investors: Washington Could Ruin Wall Street's Party

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Attention Investors: Washington Could Ruin Wall Street's Party

CNBC contributor Michael Farr of Farr, Miller & Washington cautioned investors that the "Trump rally" could come to a quick end.

Speaking as a guest on CNBC's "Halftime Report" segment on Friday, Farr suggested Friday's strong earnings report from several large banks offers some support to the "Trump rally" but comes at a time when the rally is showing signs of running out of steam.

Farr continued with a brief history lesson that may apply to today's market. Specifically, the stock market rose 8 percent during the time period between President Ronald Reagan's election and inauguration. Several months after the late Reagan took office the U.S. economy entered a recession.

Granted, starting in 1982, the stock market entered one of the strongest bull markets ever.

What's That Mean For Inauguration 2017?

Shifting back to present day, he stated that there is "a lot of hope that can get built up" at the beginning of President-elect Donald Trump's term before he is able to accomplish anything.

"I think these bank earnings help support some of the enthusiastic rally — but there is a lot more left on the table," he added.

Specifically, the "real meat" of Trump's proposals won't even be seen until 2018 so the market is "trading on anticipation of wonderful things happening in Washington." And needless to say, Washington is "messy," which leaves room to disappoint investors.

 

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