Trump alone not behind market euphoria: Peter Cardillo, First Standard

In a chat with ET Now, Peter Cardillo, First Standard, says the fundamentals for the stock market and for the economy is basically a good part of what is behind this recent euphoria.

Edited excerpts:

The Dow here is at 20100 plus levels. This has clearly taken everyone by surprise because everyone believed that once Trump takes over it is going to be all the way downwards for equity markets. That does not clearly seem to be the case?

Up until yesterday, we had some fairly decent earnings being reported by largecap corporations. That was basically the reason why we saw such a strong opening yesterday and then a follow through to close above 20000. Of course, yesterday was just the opposite when the Dow made some gains towards the end of the day but it was basically driven by a runup in Goldman Sachs while the broader market actually took a step backwards.

There are certain aspects of Mr Trump’s economic plan and promises now being put into place but again the fundamentals for the stock market and for the economy is basically a good part of what is behind this recent euphoria.

Are you admitting and indicating that there is a lot of froth in equity markets? The fact that markets are of the view that Donald Trump will jumpstart the US economy this thesis will get challenged?

You have to remember, at one point most of the Trump rally is going to have to come to fruition in the sense that we are going to need the biggest and most powerful of his promises and that is lower taxes to kick in. Of course, he has not yet proposed that in the congress but I would suspect that he will in his speech over the next few weeks as he addresses the nation. But again, when reality sets in, then the market is going to have to deal with the basic fundamentals and this euphoria over the prospects of the new administration will be terminated.