Opinion: How the stock market — even near record levels — shows the emptiness of Trump's bluster – MarketWatch

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Just 164 days into Donald Trump’s presidency, this is where we are: The president of the United States demonstrates his “potency” with a doctored video of his appearance at WrestleMania 10 years ago, when he hosted a reality-TV show whose ratings were falling apart. (Sad! Yet familiar!).

As anyone older than 12 knows, Trump’s Twitter stunt demonstrates the opposite. You know what else shows that Trump’s as potent as a 71-year old sans Viagra? The stock market.

The market is Trump’s pride, and his validation, he thinks, much as he thinks his health-care plan expands insurance coverage, though the meanies at the Congressional Budget Office say it’ll toss 22 million people off the rolls.

If only it were true.

Yes, the S&P 500 SPX, +0.23%   is up 14% since the election, including 8.5% this year, and trading near record levels. It’s also up 265% since early in the Obama administration. Look closely at what’s up and what’s down, and you’ll see the emptiness of Trump’s bluster, in this as in all things.

You can look at Trump and the market seriously, or as a joke. As I did with my “Trump portfolio” for MarketWatch last year, Trump mixes seriousness and ridiculousness all the time, but with no sign he understands the difference.

Jokes first:

The one stock everyone was sure Trump would boost — whether they did joshing portfolios or serious ones — was Cemex CX, +2.55% CEMEXCPO, +0.98% the Mexican concrete company people assumed would be willing to build Trump’s border wall, and would exploit cheap Mexican labor (presumably) and evade Trump’s promised trade restrictions to submit the low bid.

Of course it’s stupid. But (some) people meant it.

Instead, Cemex is up 12% since the election, but all since June 1. Anyone who thinks Cemex spiked because Trump suggested on June 20 that Mexico could pay for the wall by putting solar panels on top and selling electricity — let’s just say your children are filing for conservatorship.

The rest of my Trump portfolio is scarcely better. Land’s End LE, -1.68%   — seller of warm coats for emigrees to Canada and brown shirts for those who remain — is down 40% since March. Gun companies were to thrive: Smith & Wesson parent American Outdoor Brands Corp. AOBC, -2.03%  is down 24% since the election.S&P’s Real Estate Investment Trust Index XLRE, +0.93% is virtually unchanged this year and up 4% since the election, but down 9% since Trump accepted the GOP nomination.

H&R Block HRB, +0.49% slated to get hit by Trump’s tax “reform,” is up about half, including 35% this year.

Even Brown-Forman BF.B, -0.76% BF.A, +0.10%  , maker of Jack Daniel’s, which I included on the premise that Trump’s presidency called for stiff drinks, is only up 2% since the night before the election.

The point is, Trump basically affects nothing. Investors know he can’t sustain concentration long enough to keep (or even remember) his promises.

Now let’s get serious.

The core of the “Trump bump” theory was that higher interest rates and a hotter economy would boost banks and consumer cyclicals, while new infrastructure spending would boost construction. Energy stocks would zoom, thanks to relaxed regulations that would (somehow) simultaneously boost oil supplies and prices.

This wasn’t really smart but it was internally consistent, and it did spark a kind of late-2016 bump that quickly wore off, mostly in financials and energy stocks.

But this year is perfectly ordinary, Mr. President. Sorry. Overall gains are only modestly impressive, a lot of the late-2016 Trump Bump has been reversed, and market momentum is with companies staffed by people who think you’re a joke.

There is no economic surge to push the market. Yields on 10-year Treasury notes TMUBMUSD10Y, -0.04%   are lower than in December, despite three increases in the Federal Reserve’s target rate. There’s no interest-rate spike because job growth is down 17% from last year and GDP growth has slowed.

The S&P’s financial-stock index is down slightly since early March, when banks finally crested. Energy shares are down 15% this year, because crude oil CLQ7, -1.34%   is down 13% since Dec. 30. Fluor FLR, +1.68% the biggest infrastructure-building public company, is down 11% this year.

This year’s rally is about Trump’s skeptics, even enemies: The S&P Tech index is up 15% since Dec. 30, but Santa Clara County, in Silicon Valley, went for Hillary Clinton by 53 points. The rest of the market, beyond tech and a slumping telecom sector, is up 7.3%. Even that paltry number is propped up by stocks like Amazon AMZN, -1.48%    (whose CEO, Jeff Bezos, owns The Washington Post, the No. 1 journalistic thorn in Trump’s side), Expedia EXPE, -0.82%    (Chairman Barry Diller called Trump’s campaign an “evil experiment,” and shares are up 30%), Priceline PCLN, -1.46%   (makes most of its profit abroad, on international tourism, up 26%) and Netflix NFLX, -2.17%   (Hollywood loves the president about as much as Silicon Valley), all of which S&P calls non-tech consumer companies. It’s also propped up by health-care companies, up 15% year to date, as hospital and insurance executives nearly all oppose Trump’s plans, and whose shares are being supported by the GOP’s looming health-care failure.

Look at what’s driving top tech funds like T. Rowe Price Global Technology Fund PRGTX, -0.83%   — trends Trump couldn’t explain on a bet. Companies in cloud computing, videogaming, and chip equipment aren’t economic-growth plays; they’re business-model reinventors and market-share thieves. Their wins have zero to do with Trump. And that T. Rowe Price fund made a ton on Tesla TSLA, -2.49%   — whose factory was financed by Barack Obama — before taking profits.

Trump did WrestleMania because he needed attention then. He tweeted the bastardized video of it to bait CNN because he craves attention now. Too late, Mr. President. The market ignores you, and the country is beginning to.

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