When certain candidates threaten to pass legislation that force businesses to give benefits to certain classes, that certainly plays a role. And yes, lowering corporate tax rates would definitely give confidence to businesses. It seems very obvious you are not a business owner or upper management.
Our last two recessions and market corrections were kind of avoidable; I think the last big threat was stagflation and usury laws constraining the economic potential of consumer credit. Of course we can't keep overspending governmentally by between half-and-a-whole trillion every year.
true, the stock DOW fell >40% (from ~ 15,000 to 9,300) during GWB's watch, attributable to the financial crisis and GWB's inability to rescue/stabilize the industry the DOW jumped ~80 % (from 9,300 to 17,100) during Obama's watch, mainly due to his ability to stabilized the financial crisis, and then QE. the DOW hit all-time highs during his 1.5 years in office Trump took office after the heavy-lifting was done. actually, what we're witnessing is synchronized global growth, w a helping hand from the respective Central banks btw, since Trump won the election, these stock markets overseas, Japan, Germany, HK, China, UK, and others have out-performed the DOW
outstanding post, but 2 would impact the Russell index (small US co) more; for the most part, S&P 500 / DOW co have global operations which have reaped the benefits of the recent Synchronized global growth trend
To a certain extend, my retirement portfolio have never been better, if this keep up, I should have a pretty comfortable retirement, as long as AI does not replace me too quickly.
Let's hope so, because that might be your sole source of income, depending on your age, comes retirement. But for the other main streeters, who were not feeling it prior to Jan 2017, are they feeling it now?
I think there is some good explanation here. The thing that does concern me though is that there is some Trump effect where conservative stock investors became very confident about the economic outlook with Trump's election giving the Republicans control of the whole government. They have these expectations that regulation will get looser, taxes will get cheaper, and company profits will therefore improve. But the price bump from that is built on their confidence and expectation and has not yet been ground out in cash flows. Not having the underlying fundamentals to support the price expansion means that we can get a significant correction if the confidence is lost. The Trump Admin has done a lot of work undermining regulation which I'm sure is appreciated, but there may be unexpected consequences there to come later; meanwhile, they were unable to do anything on Obamacare or pass any significant legislation at all. If you have a big catalyst that makes people really think this Admin isn't going to be able to deliver expectations -- say a failure to get tax reform -- I could see the market clawing back not only the tax reform premium but the entire Trump premium.
LOL. Lowering corporate tax rates just gives free money to businesses - not "confidence". And in the bills we're seeing so far - especially after the House castrated the one element that would have benefited smaller businesses in comparison to big ones - it's mainly to businesses that are flush with cash and are unlikely to use it to expand or create jobs or anything productive.
Yea I’ve been putting more of a % of my income into savings, keeping that powder dry until the inevitable market correction happens. Looking forward to going hunting; buying good companies for cheap.
Free money? Since its just 'free money', why dont we just tax corporations 75%? Hell, why should a business profit, lets go all in and make it 100%. Yes, lowering corporate tax rates will result into many businesses hording their cash stock pile further (like your beloved Apple). But there are businesses who will use that same cash to reinvest in their company. That said, I am not all that impressed with the current tax plan. I dont hate it and im not going to b**** if it does or doesnt get passed. Our tax dollars are poorly used so I am not going to go on a crusade against the ultra wealthy just to find ways to waste their money. This is politics as usual, fighting over things that matter little and neglecting the more important issues out there.
Except all the tax cuts are designed to expire in 10 years (or 9, given that the Senate Bill wouldn't implement the cuts for a year). No business is going to make long-term changes based on temporary tax cuts. The one good tax change that was supposed to challenge companies hording of cash overseas was the one thing removed from the House tax plan (because of big companies complaining), so now they are having to raise other taxes to compensate for the money lost in removing that provision. There are good tax reforms that can and should be implemented. A few are (or were) included in this bill - but it includes far more actual negative things.
Here is an example of the one of the many stupid provisions included in the bill: https://www.cnbc.com/2017/11/13/sil...-out-about-options-provision-in-tax-bill.html It's terrible policy, but the reason to include is that, while destroying compensation strategies and cutting the amount of money the government brings in long-term, it would increase what it brings in over the next 10 years, so it can help balance the 10-yr budget at the expense of good decision making and long-term fiscal health.
Good post. The only thing I would add is the Trump administration is changing or repealing regulations on businesses that in the past dampened growth.
