Ignore the Fat Man in the Red Hat Taking Credit for the Market
Definition: solipsistically: of or characterized by solipsism, or the theory that only the self exists, or can be proved to exist:
Economic Fact: While the White House tweets "How bout them stocks" virtually everyday, the real U.S. economy continues to grow at about the same slow pace it has for most of the now eight-year-long expansion--2% ish.
There are many, many structural reasons why this trend is stuck in neutral...and now the lack of excitement over true tax-base broadening tax reform is ONE of those reasons.
The good news? 45-out of-45 of the largest OTHER economies elsewhere in the world are picking up speed. In the same IMF World Economic Outlook report that discounted the chances of tax reform and predicted U.S. gross domestic product growth of just 2.2 percent in 2017 and 2.3 percent in 2018 (they MUST be Transformity Research subscribers!) they upgraded GLOBAL GDP growth estimates to 3.6 percent in 2017 and 3.7 percent in 2018.
Really Key Point: The companies in the Standard & Poor’s 500 Index got 43.2 percent of their earnings from outside the U.S. in 2016; that percentage will surely be higher this year with our 9% weaker dollar in 2017, and it’s probably higher for the Dow 30 companies, too.
Don't tell the “America first” president but he is basking in a market boom driven mainly by overseas economic growth.
Economic Reality: The rally in the US stock market in 2017 no more belongs to the President or his non-existent “agenda” that never goes anywhere than the 2008-2016 bull market belongs to Obama.
The S&P 500’s advance is actually trailing the average country market’s return.This year, virtually every country stock market around the world is substantially higher – from Europe to Asia to Latin America.
Nothing the President or Congress have done during this administration has been material so far. And as the legislative calendar winds down, it appears that this is yet another year of mostly gridlock.
Running around in a red hat taking credit for a synchronized world economic recovery, that was already well underway, is perfectly on-brand for these people; it’s both solipsistically dumb and a lie.
But was else would we expect from our mendacious POTUS?
PS: I was using some big SAT words just for fun!