NEW YORK, NY Nov. 21 (DPI) – Stock markets in the US are – so far – focusing on the potential of a Trump presidency to carry out a Republican agenda of tax reform and business deregulation in the years ahead.

Major market indices – including the Dow Industrial Average and the S&P 500 – are up nearly 2% since the Nov. 8 election, near record highs, something of a surprise to many analysts who see Trump as an unpredictable actor whose behavior could as easily spook investors.

Indeed, the stakes are especially high for anyone who owns US stocks – and for the US economy. For one thing, US stocks have been on a record-setting long bull run, driven as much by years of government policies of near-zero short-term interest rates as by business performance.  The Federal Reserve, well aware that debt levels could overwhelm the US economy after the 2008 financial crisis, pursued a highly stimulative program to prop up asset values – stocks, bonds and real estate. And with bond yields now at record lows, many investors have pulled out of fixed-income instruments and poured even more money into stocks. It’s a distortion in valuation that, to many, is calling for a correction.

But so far, the neo-Keynesian strategy of easy money and Central Bank asset buying has worked at pushing up stock values. It’s no secret that stocks are now vulnerable.  As Trump himself declared during the debates, the stock market is now “in a bubble.”

In recent years many companies across sectors have stockpiled cash and engaged in stock buybacks rather than engage in meaningful business investment.

Many corporate managements are now cautiously optimistic that the new activist outsider president-elect will not carry out his most extreme campaign promises, particularly his claims to pull out of trade agreements.