It’s Not Donald Trump That American Corporations Are Excited About

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Corporate America is about to go on a spending spree! They’re so excited about Donald Trump that they can’t hold themselves back!

Except, um, maybe that’s not it after all. The Wall Street Journal reports that the stock market rally of the past month might be due to something more mundane:

The 6.7% rally since then, much of it since Election Day, has largely been attributed to the potential for tax cuts, looser regulation and fiscal spending under the president-elect. But the rise has also coincided with a fundamental improvement: U.S. companies’return to earnings growth.

“It’s earnings growth that drives stocks over the long term,” said Tom Cassidy, chief investment officer at Univest Wealth Management Division…Earnings for companies in the S&P 500 grew 3.1% in the third quarter from a year earlier, according to FactSet, entering positive territory for the first time since the first quarter of 2015, when they grew 0.5%. Analysts polled by FactSet expect the rebound to continue, and are estimating a 3.2% growth rate in the fourth quarter of 2016.

The third quarter, needless to say, was back when everyone was expecting Hillary Clinton to be the next president of the United States. Corporations may indeed be excited by the prospect of lower taxes and the end of pesky regulations, but if you want to know why the stock market is rallying, profitable companies are a more likely explanation than anything Trump is promising.

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Fact:

In-depth journalism that investigates the powerful takes real money and is so damn important right now.But it doesn’t take a Mother Jones investigation to know that billionaires and corporations will never fund the type of reporting (like they do politicians) we do that exists to help bring about change. Instead, our mission-driven journalism is made possible by people power, and has been for 46 years now since our founding as a non-profit.

In “TITLE TK” Monica Bauerlein writes about the perilous moment we’re in, and why it’s so important that we raise $325,000 by the time November’s midterms are decided so we can be ready to throw everything we have at the big issues facing the nation no matter what happens. Please help MoJo’s people-powered journalism with a donation today.

$400,000 to go!

payment methods

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