Hedge fund titan Carl Icahn says the stock market’s rally following President-elect Donald Trump’s victory may have gone too far.
All the major stock-market indexes jumped to record highs after the election, and the Dow Jones Industrial Average has gained more than 1,000 points in the month since.
Investors’ optimism has increased, as they bet that Trump’s promises to cut corporate taxes and ease business regulations would be additive to company earnings.
“The market is not going up because Donald has gone and kept Carrier from going to Mexico,” Icahn told CNN’s Poppy Harlow on Saturday. “The market is going up – and maybe it’s gotten ahead of itself, I’m not going to say it hasn’t – but it is going up because it’s perceived that this is going to be a very pro-business presidency and government.”
On taxes, he added, “certain investors are saying, ‘Hey look, why should I sell now when … I can save a lot of money by waiting till next year?’ So what happens is that a lot of stock is not offered, and therefore it’s very bid.”
There are many reasons why the market is rallying that could change “on the dime,” Icahn said. He added that he bought stocks after the election, but wished he had purchased more.
Icahn, a longtime Trump supporter, said that the president-elect’s decisions since the election have also boosted the market’s confidence.
He said Trump’s deal with Carrier, which gave the air-conditioner maker incentives to keep 1,000 jobs in Indiana, was a step in the right direction because unions had become too heavy-handed.
“The unions can be very difficult at times,” he said. “I’m not anti-union, but you can’t tell me that some unions really haven’t made the lives of businessmen very difficult.”
Icahn said he had been involved behind the scenes with helping the transition team pick some key nominees for the next administration.
“There are going to be many bumps on the road, but I think Donald is completely on the right track in the things he’s trying to do,” Icahn said. “Obviously, it’s going to be very difficult to do a lot of them, and there’s going to be bumps on the road.”
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