The Trump rally has all the signs of a late-stage bull market run — pent-up enthusiasm bringing the last of the skeptics off the sidelines for one final runup that ultimately spells the end.
While that may well be the case, it could take a while to unravel.
Donald Trump's improbable election brought with it an equally unlikely market rally, with the Dow Jones industrial average jumping more than 7 percent since and the small-cap Russell 2000 exploding more than 15 percent since the day after the election.
Money has come pouring in from the sidelines. Exchange-traded funds posted their single biggest inflows ever for November with a net $49.1 billion streaming into ETFs that track U.S. stock indexes.
It all sounds good for now. But for Trump, it's reasonable to wonder whether he's simply the beneficiary of timing that soon will run out.
"Donald Trump is a victim of being elected late in the cycle, with multiples extended and the Fed now a headwind," David Rosenberg, chief economist and strategist at Gluskin Sheff, wrote in his daily note to clients. He was referencing the high price-to-earnings levels in the market, as well as the likelihood that the U.S. central bank probably will be raising its overnight interest target next week, with more hikes to come in 2017.