Earnings Call "Trump" Mentions Down: Bullish

less worry about trump good for stock market
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Why is investor sentiment so low when the stock market is at all-time highs? Most likely it's based on political concerns. We've heard throughout the Street since before the elections until today that President Trump was a risk to the stock market. But that risk has dropped materially and we're going to quantify it.


First, Investor Sentiment Makes No Sense

Amazing, incredible, off the charts. Investor sentiment climbed last week to...

"Optimism climbed to an 11-week high, it continues to remain below its historical average."

Source: AAII American Association of Individual Investors

What a minute. Below historical averages? That's not so high is it?

The stock market is at all time highs isn't it? But sentiment is still not up.  What are they so worried about?

Investors Have Been Worried About Political Risk But That's About To Change

Factset had an amazing stat. They reported that so far of the companies that reported, the number of times "Trump" was brought up in earnings transcripts dropped... Big time!

By how much?

Since Q4 Trump-complaining dropped 87.5% and since Q1 Trump-complaining dropped 75%. CEOs are less worried about Trump in a material way. Why? Because business is doing just fine and nothing really that bad happened yet.  How much can they continue complaining about something that never really materialized.

As companies have less Trump-complaining (official stat) investors are going to worry about that a lot less also.

If the companies you are invested are less worried, why should you still be so worried?

And That Can Let The Cap Off The Market To Go Higher...

So even with all this pessimism the markets have had no problem hitting new high after new high.

Quick question:

What's going to happen as all that pessimism unwinds?

Multiple Choice:
A) The stock market will go higher
B) The stock market will go higher
C) The stock market will go higher
D) The market's going to be going a heck of a lot higher

Which did you choose? Take your time on this one and remember always trust your first guess (SAT rules 101).

We chose D. (answer in comments).

There are no wrong answers to this one.

Happy and profitable trading!

By: Chaim Siegel, Elazar Advisors, LLC

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Disclaimer: Stocks reported by Elazar Advisors, LLC are guided by our daily, weekly and monthly methodologies. We have a daily overlay which changes more frequently which is reported to our premium members and could differ from the above report. Portions of this report may have been issued in advance to subscribers or clients. All investments have many risks and can lose principal in the short and long term. This article is for information purposes only. Ratings are based on hypothetical trade directions. By reading this you agree, understand and accept that you take upon yourself all responsibility for all of your investment decisions and to do your own work and hold Elazar Advisors, LLC and their related parties harmless. Any trading strategy can lose money and any investor should understand the risks.

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