Stock markets have been on a tear since the Trumpster got elected. Their values are based on the hope Trump will wave a magic wand and make “America Great Again”.  So far the moron has made things worse.  Any improvements that have occurred are a result of Obama’s policies having a lagging effect, not Trump.  Unemployment is flat.  This should be the low in unemployment during Trumps presidency because he is scaring away foreign businesses from opening up in the U.S.  The cost of checking every person these businesses intend to hire is going to be not worth the effort.  Plus, no one has any idea what his tax changes will be.  The only thing we do know is that all tax changes will benefit the wealthy. 

Trump is under the illusion that all Americans have too much money and they are just waiting to spend.   In truth, Americans have little savings and household income is one of the lowest in the industrialized world.  With Trump making a mess of the U.S. there will be very small wage gains, if any, during the next four years. 

How can anyone believe what Trump says?  He is proving to be a compulsive liar.  He is deterring foreign investment in America and is acting as if he wants a wants a trade war.  If he does, America will get one and lose miserably.   The rest of the world will just improve relationships with other countries and do their trade elsewhere.  Europe has over half a billion consumers and the Far East and Asia are home to billions.  The US market is a drop in the bucket compared to the rest of the world. The results are already bearing fruit as many governments are switching their attention to trading more with South American countries.  Even Canada has sent junior bureaucrats down to South America to explore possibilities. 

American corporate earnings are up from a year ago.  For the Dow Jones Industrial Average (DJIA) earnings increased 1.8% to $98.31.  The bigger sample of earnings, the S&P 500 index, came in at $9.54, up from $8.78.  Corporate profits are still down from two years ago when Trump announced he was running for President.  Specifically, profits for the Dow Jones Industrial Average were $106.25 while the S&P 500 profits fell from $10.26.  On these falling earnings both the DJIA and S&P500 are up 11.2% and 4.4%, respectively.

On March 1, the S&P 500 traded at its all-time high of 25.1-times earnings.   The Dow Jones Industrial average is currently the 2^nd most expensive in its 97 year history. This means the stock market expects earnings to double in three years in order bring markets back to their historical averages.  If this was the case, earnings would need to be increasing by 25% annually for just over the next two and half years.  This has never occurred, nor will it ever.  So, either earnings must soar or the stock markets must correct back to their norm, which is roughly between 16-17 times earnings. 

By every yardstick stock markets are in very expensive territory. They are vulnerable to a 25% pullback just to get back to this century’s average price earnings ratio, and a 40% decline to bring it back to the average of last century. 

We suggest no more investing in the U.S.  Canada is a better place to keep ones money.  The only US based companies you want to hold are those that conduct the majority of their business offshore.  Our two recommendations fall into this category.  There is 46 months left of Trump.  He is determined to destroy his country and will most likely be successful at it.