While stock indexes are posting record YTD gains, with the S&P 500 showing a 20% annual gain for the first time in more than 25 years, market melt-ups may conceal a juiced up economy. Is the next presidential administration being handed a live grenade? Parabolic government spending and a surge in public sector jobs gains may indicate the pin is out.
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Meanwhile, legendary investor Stanley Druckenmiller told Bloomberg earlier this week markets, his favored election indicator, appear to be pricing in a Trump victory. Druckenmiller pointed to signs in bank stocks, crypto markets, and even Trump’s own social media company, $DJT.
Even as markets soar, and per Druckenmiller, a Trump victory is baked into market indicators, there are signs the next Trump administration could reap a harvest of economic turmoil being sown now. Americans are coping with record low housing affordability under the Biden-Harris administration, and while wages have failed to keep up with inflation for generations, inflation has gone parabolic during the past four years.
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