National Post (National Edition)

The Hillary RALLY

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Former U.S. secretary of state Hillary Clinton attends an unveiling ceremony for the U.S. Postal Service’s Oscar de la Renta Forever stamp on Feb. 16 in New York City.

The S&P 500 may be up 10 per cent since Nov. 8, but it also rose seven per cent between late June and election day.

Optimism about a business-friendly president and Congress has undoubtedl­y provided a boost, but the latest advance (within the eight-year bull market) was already in full swing — largely due to rising inflation expectatio­ns.

There is nothing to suggest Clinton would have derailed this trend, at least not in her first month or two in office, as the Democrat administra­tion was largely expected to maintain the status quo of her predecesso­r.

“As we look at the behaviour of the market and economy since mid-year 2016, it’s clear that this reflationa­ry process was already under way prior to Trump’s surprise victory,” said Jonathan Golub, chief equity strategist at RBC Capital Markets.

He noted that the deflationa­ry backdrop in place previously had been putting downward pressure on economic growth, but factors such as the tight labour market has helped reverse that trend, both in terms of inflation and interest rates.

“A market advance based solely on hoped-for, progrowth policies is extremely fragile,” Golub said. “By contrast, we see reflation and an uptick in global activity as the key catalysts behind a more robust rally.”

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