Wall Street Bets Trump Will Make America Grow Again

So why is a bet on small-cap stocks a bet on America? 

It's because the companies in this index have little exposure to overseas markets -- and are closely linked to the American economy. Wall Street is clearly starting to believe that Trump's infrastructure and tax plans will boost growth. 

"Lighting the match to the rally has been optimism that a Trump presidency could spark the domestic economy," said Ryan Detrick, senior market strategist at LPL Financial. 

Trump has promised to unleash more than $1 trillion of spending on roads, bridges and airports in an effort to stimulate growth. He also wants to cut taxes and remove excessive regulation, two other ideas that businesses have been pushing for. 

The Russell 2000 surge is part of a broader move towards risky assets since the election. Stocks in general are doing great, with the Dow and Nasdaq hitting record highs in recent days. Safer plays, especially government bonds, are slumping. 

"The overall outlook compared with prior to the election is substantially better," said Chris Retzler, who manages the Needham Small Cap Growth Fund (NESGX). "We're on a path of higher economic growth."

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