SELL on the rumour, buy on the news runs one version of a hoary stockmarket adage. And it certainly applied to last month’s presidential election. Before the poll, many investors were concerned about the risk that Donald Trump might become the 45th president. But as soon as the result was confirmed, they piled into shares. American equity mutual funds enjoyed four consecutive weeks of inflows, the longest streak since 2014, according to EPFR Global, a data provider.

One driver of the rally was Mr Trump’s planned fiscal stimulus. Investors believe this will lead to bigger deficits; hence the rise in bond yields since the election. But they also hope it will boost the American economy. That may explain why the Russell 2000 index of smaller companies, which tend to have a domestic focus, has outperformed the S&P 500 since the election (see chart). If this goes on, such stocks may become known as the Trumpettes.

Another factor was the planned cut in corporate-tax rates. The official American corporate income-tax rate is 35% (rising to 39% when state taxes are added). Standard & Poor’s, a ratings agency, reckons that the effective rate paid by companies is 29%—largely because profits earned abroad are not repatriated and so are not taxed. Tobias Levkovich of Citigroup reckons that a cut in corporation tax from 35% to 20% would boost earnings per share for S&P 500 companies by 7%, even allowing for the offsetting impact of a stronger dollar and higher interest rates (both of which seem likely in 2017).

Investors may also be smacking their lips at the prospect of companies’ repatriating their overseas cash piles. A repatriation tax “holiday” in 2004 saw companies bring back around $600bn, much of which was used to buy back shares or pay dividends. Mr Levkovich estimates that investors may receive cash worth around 3% of the American stockmarket’s total current value. A lot of this money may be ploughed back into equities.

But the effect on the American market has not been uniform. The best-performing bit of the stockmarket since the election has been financial firms. In terms of individual sectors, banks and life-insurance companies have both managed double-digit percentage gains. Investors clearly hope that the repeal of financial-services regulation, as well as a steepening of the yield curve, will boost Wall Street’s profits—something voters in the rustbelt might not have realised would be one striking consequence of a Trump victory.

More broadly, the election has prompted a shift out of stocks such as power utilities and consumer-goods producers, which are less tightly linked to the overall strength of the economy, and into more cyclical shares such as miners and construction companies. The poor old utility stocks have suffered a double whammy since the election. Such firms pay high dividends and are often treated as alternatives to government bonds by income-seeking investors; as a result, they have been caught up in the bond sell-off since November 8th.

All this has had some perverse effects. One popular investor strategy has been to buy shares with low volatility (those that tend to rise and fall less rapidly than the overall market); exchange-traded funds (ETFs) have been set up specifically to own low-vol shares. According to BNP Paribas, a French bank, low-vol ETFs outperformed the rest of the American market in the first seven months of the year. But in the aftermath of the election, low-vol ETFs fell in price and actually became more volatile than the overall market.

The danger in all this is that the market gets ahead of itself. By the middle of 2017 investors expect the earnings of S&P 500 companies to have risen at an annual rate of 12.3%. Some of this reflects a recovery in the energy sector after last year’s falls in oil prices. But even if energy stocks are excluded, profits are expected to be 7.9% higher, according to Société Générale, another French bank.

In recent years analysts have regularly forecast that companies would produce double-digit percentage growth in profits, only to be disappointed. It may well happen again. Even if Mr Trump’s proposals get through Congress unscathed, they may take time to have an impact on the economy, and thus on corporate profits.

In the meantime, equities trade on a cyclically adjusted price-earnings ratio (which averages profits over the past ten years) of 27.3, according to Robert Shiller of Yale University. That valuation is 63% above the long-term average. And interest rates look poised to rise, a development that has in the past upset equity markets. The first blast of the Trumpettes may yet be followed by a loud raspberry.