The market is pricing in a lot of "Everything is Awesome". Reader Jason Leach, CFA, asks "Is all this awesomeness, real or fantasy? Has it been pulled forward?"

Pulling Awesome Forward

What follows is a guest post from Jason B. Leach of Fusion Point Capital. His title is Pulling Awesome Forward.

U.S. markets have "celebrated" the Trump election, with the S&P 500 rising ~8% after a quick ~4% drop pre-election (and much deeper drop in futures the night of the election). There are quite a number of themes, positive and negative, continuing into the new year from 2016. The "positives" – infrastructure spend, tax reform, healthcare reform, and deregulation – have built a relentless bid, or scared off sellers…for the time being.

The "negatives" – dollar strength, dollar scarcity, global debt bubble, Fed divergence, stress in European and Chinese banks, Yuan devaluation, rising populism in Europe (with French, Italian, German elections around the corner), low but rising probability of Euro-Exits, protectionist leanings (Smoot-Hawley tariffs contributed to a 66% decline in global trade from 1929-1934), and U.S. equity valuations at the third highest level ever (median stock on the S&P 500 at 98th percentile, and the all-time highest valuation for the index when including the enormous amount of corporate debt growth over the past decade) – are relegated to the dark recesses of pre-election…pre-light.