USA companies are being systematically deregulated to bare minimums all accross the board and their tax bills have been significantly reduced so they can keep more of their profits....Being allowed to simple pass the social and environmental externalities associated with their cost of doing business to society will for sure allow them to produce at even lower costs and generate even bigger profits and make stocks more attractive...Reducing social and environmental costs of doing business to the minimum and passing those externality cost to society should be expected to be good for stocks prices ...Can this be the reason behind strong stock markets under president trump?. I think yes, what do you think?
Definitely, any political decision has power to establish the market policy.
Slight changes in visa policy make dent on companies employing non American personal.
Hence political goodwill definitely has its impact on stability of stock market irrespective of country.
Stable is govt, so is market and vice a versa.
A stable government is one where a single party or a collective group of parties forms a government with a strong majority. This reduces its dependency on allies, especially when passing Bills in Parliament. The PREVIOUS government was dependent on allies to pass reform measures. This led to many obstacles and many reforms were delayed or shelved. At a time when much depends on strong government policies, the stock markets were rooting for a stable government.
A strong government is very important for investments. It holds the responsibility to make the investment climate more conducive. This has a direct bearing on the overall growth in the economy. It, thus, affects market sentiment.
Dear friends, thank you for your comments.
The question is about externality maximization theory and stock markets, do stock markets are more attractive when companies are allowed to pass the maximum social and environmental externality cost of doing business possible to society to reduce cost and increase profits even more? Can this be the explanation for strong stock markets?
Have a nice day!
Some food for thoughts on democracy under amorality can be found here in this paper:
https://www.researchgate.net/publication/329905677_Moral_and_Amoral_Liberal_Democracies_How_Targeted_Chaos_Can_Affect_the_Democratic_Process
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