Some form of corporate tax reform under Trump seems likely likely as it is a stated priority of President Trump and has widespread Congressional support. In the following analysis, BofA analyzes the four components that could have big equity implications on S&P500 earnings over the coming years.
"It seems to me like a lot of people think we're in a new inflationary boom," but, warns Gluskin-Sheffs David Rosenberg, "the answer is no... that's just not gonna happen. It's not like Ronald Reagan at all in that regard."
"I don't buy it at all" exclaims Gluskin Sheff's David Rosenberg in a recent interview with MacroVoices.com, "look all I'll say is that in 2009, 2010 when the Fed embarked on QE, along with 0% interest rates every Tom, Dick and Harry portfolio manager and bond market pundit out there was screaming about the end of the secular bull market in bonds," and they were all wrong.
Global export of goods (priced in US dollars) has collapsed in Japan, the EU, and emerging markets, since their recovery highs following the great recession. The US is the best of the lot, but US exports of goods are down substantially as well. What’s behind the move? Is it protectionism? Currency related?
Apparently audience size matters because the MSM couldn't stop talking about Trump's obsession with it for an entire week. These photos show who was really obsessed and who was driving this story to the undeserved importance that it got:
"If Trump’s policies work or if they otherwise demonstrate that we are not stuck in secular stagnation, it’s bad for stocks and bonds and good for the economy. If we wind up back in recession, it’s good for bonds and not necessarily terrible for stocks because valuations can stay high, buoyed by low cash and bond rates."
“At market tops, it is common to see what I call the ‘high-five effect’ - that is, investors giving high-fives to each other because they are making so much paper money. It is happening now. I am also suspicious when amateurs come out of the woodwork to insult other investors.”
Who can forget the "doom and gloom" warnings about the fate of the UK should Brexit win? Well, according to the latest confirmation received on Thursday, they were not only wrong but with an ironic twist, because according to the latest GDP report, the UK economy grew by 2% for all of 2016, making it the fastest growing economy among the G7 in the past year.
Although the stock market is giddy from President Trump’s pro-growth policies, there is another constituent not quite so enamored with recent developments...the more Trump pushes on the fiscal accelerator, the harder the Fed will lean on the brake.