”Expectations for Trump policies are excessive,” US bank warns

It has been pointed out that the market, which rallied after the US presidential election, is being overly optimistic due to expectations of government policy.
"Investors are ignoring disappointing economic data and placing excessive expectations on the possibility of positive policy in the future," he said. Wells Fargo said it had been bullish since the U.S. presidential election in November last year.
The market then highlighted that, through the 17th, the S&P 500 index had risen 0.38% from the previous month, while the Dow Jones Industrial Average had fallen 3.12%.
In particular, during the same period, the Russell 2000 Index, which is dominated by small-cap stocks, fell 4.06% from the previous month.
Wells Fargo explained that the difference in market returns was due to a decrease in the release of surprise economic data.
The Bloomberg US Economic Surprise Index they mentioned has fallen 1.2% since peaking in mid-November last year.
However, it has since shown a downward trend and is currently just above zero. Wells Fargo in particular stated, "After the presidential election, positive expectations rose in the stock market.
"The mood is worrying," he said. Above all, he warned that if market participants place concentrated bets on a positive future, the market will have to digest the gap.
Investment banks point out that historically, when a gap emerges between market expectations and the actual implementation of policies, markets have suffered major blows following the inauguration of a new president.