US Investors are Ignoring Political Drama, the ‘Economy’s Everything
National Economic Council Director Larry Kudlow said stock-market investors are apparently ignoring any White House political turbulence because the robust economy is proof President Donald Trump’s strategy is working.
The Bull market on Wall Street set history this week when it eclipsed the S&P 500’s all-time high despite Paul Manafort, President Donald Trump’s one-time campaign manager, being found guilty Tuesday on multiple fraud counts, while longtime Trump lawyer Michael Cohen admitted to tax fraud and making an illegal campaign contribution.
The veteran financial guru said a thriving economy is overcoming those issues.
“The economy’s everything when it comes to markets and confidence, and I think that markets frankly look through all these various political issues,” said Mr. Kudlow, who served as The Trump Campaign’s senior economic adviser.
“There’s no change in policy coming, that’s what really matters. Keep your eye on the ball, and I think the markets have done a good job,” said Mr. Kudlow.
To be sure, the US economy looks set to forge ahead as fresh reservoirs of domestic demand carry it past turbulence overseas, keeping the Fed on course for further interest-rate hikes.
Households have more cash to spend than thought, thanks to newly discovered savings and President Trump’s big tax cuts. Firms are ramping up production and rebuilding inventories after running them down by the most since Y 2009. And government spending finally looks set to swell, after Congress opened the Moneygates in March with a $1.3-T package.
Growth in 2-H of Y 2018 could come in at 3% or more. While that would be slower than Q-2’s 4.1% pace, it would be enough to make the entire year’s performance the best since Y 2005, when GDP rose 3.5%.
Wednesday on Wall Street, the S&P 500’s Bull market turned 3,453 days old, making it the longest such streak on record.
Wall Street is widely considered to be in a Bull market that started on 9 March 2009, when investors grappled with the global financial crisis that had vaporized over half of the US stock market’s value. Since then, the index has more than 4X’d.
Now after 9 years and 5 months, investors are debating when, not if, the current run-up in stock prices will end.
Note: The S&P 500 held steady Wednesday, finishing flat to unchanged. Investors had several headlines to work through, including criminal convictions of 2 former advisers to President Trump and the resumption of trade talks between the US and China.
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