Yale Economist and Nobel laureate Robert Shiller warns that President Donald Trump is indeed a dual sword for the stock market.
"I think the 'Trump rally' does reflect something about having a business-oriented president who promises to cut regulations and maybe corporate profits, taxes," Shiller told CNBC's "Trading Nation."
And even though "those things are already known … I still suspect there is more left in the Trump rally," Shiller added.
But Shiller was also cautious.
It's possible that "Trump's quixotic personality will create some kind of crisis that will drop his approval rating much more — that's the main thing in the short run," he said.
Shiller senses "almost a kind of anxiety" surrounding Trump. "When I see the Trump supporters on television explaining themselves, I don't get a feeling of supreme confidence. They've created a revolution, and now maybe they're a little scared by it," he said.
"I don't think this is a particularly euphoric time," Shiller said of general investor attitude. "It is, I guess, for Trump voters who are enthusiastic about him, but I don't know that they feel that great at the moment with the way it has panned out so much," he said.
Meanwhile, many experts are warning that the Trump Trade could start looking more like a Trump Tantrum if the new U.S. administration's healthcare bill stalls in Congress, prompting worries on Wall Street and around the world about tax cuts and other measures aimed at promoting economic growth, Reuters reported.
Investors are dialing back hopes that Trump will swiftly enact his agenda, with a Thursday vote on a healthcare bill a litmus test which could give stock investors another reason to sell.
"If the vote doesn’t pass, or is postponed, it will cast a lot of doubt on the Trump trades," influential bond investor Jeffrey Gundlach, chief executive at DoubleLine Capital told Reuters.
U.S. stocks rallied after the November presidential election, with the S&P 500 posting a string of record highs up to earlier this month, on bets that the pro-growth Trump agenda would be quickly pushed by a Republican Party with majorities in both chambers of Congress.
The S&P 500 ended slightly higher on Wednesday, the day before a floor vote on Trump's healthcare proposal scheduled in the House of Representatives.
On Tuesday, stocks had the biggest one-day drop since before Trump won the election, on concerns about opposition to the bill.
Investors extrapolated that a stalling bill could mean uphill battles for other Trump proposals. Trump and Republican congressional leaders appeared to be losing the battle to get enough support to pass it.
Any hint of further trouble for Trump's agenda, especially his proposed tax cut, could precipitate a stock market correction, said Byron Wien, veteran investor and vice chairman of Blackstone Advisory Partners.
“The fact that they are having trouble with (healthcare repeal) casts a shadow over the tax cut and the tax cut was supposed to be the principal fiscal stimulus for the improvement in real GDP," Wien said. "Without that improvement in GDP, earnings aren’t going to be there and the market is vulnerable."
(Newsmax wires services contributed to this report).
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