Since Donald Trump's victory during the US Elections, the market has been on an almost-straight line trajectory upwards, defying most analysts expectations of doom and gloom.
The USD has also been soaring, appreciating against just about every other currency.
A large part of this is due to his victory speeches calling for rebuilding of infrastructure and protectionism rhetoric.
Yet there are some serious points to consider:
1) How is he going to pay for renewed spending? Print more money? Then why is USD appreciating?
2) How clear are his policies? No one really knows for sure what he wants to do globally and how he intends to execute his plans. Probably only he himself does.
3) Just prior to the elections, the markets were all consolidating or contracting on the back of poorer and poorer numbers. Oil was crashing and commodities were dying. How has the world situation changed to be so positive now?
4) Case in point, DBS is close to hitting $18, a higher never seen in more than 10+years. Yet the external scenario of falling oil prices, reducing bank margins and failing O&G sector keeps DBS exposed to plentiful risks.
5) Today's supposed biggie event, the Italian Referendum delivered a crushing defeat that forced the Italian Prime Minister to resign. The markets took a slight jolt downwards, and then by mid noon started heading up again. What gives?
There are plenty more scenarios to illustrate that seem to beg at irrationality.
Are we at the crux of an impending reversal?
Here's a very good pessimist's guide to 2017 :)
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