Question of the Week
Folks like Nancy Pelosi continue to scream out of both sides of their mouth claiming that not only does the GOP hurt the middle class, and but it also hurts their rich friends in California.
Do you think the GOP bill is elitist and increases income inequality?
Folks like Nancy Pelosi continue to scream out of both sides of their mouth claiming that not only does the GOP hurt the middle class, and but it also hurts their rich friends in California.
Do you think the GOP bill is elitist and increases income inequality?
Morning Commentary
Party Like It’s 1995?
By Charles Payne, CEO & Principal Analyst
12/18/2017 9:41 AM
Friday was another great day on Wall Street even though the major indices didn’t finish at the highs of the session (there was record closes all around):
- NASDAQ: 79th since Election Day and 65th under President Trump
- S&P 500: 69th since Election Day and 60th under President Trump
- Dow Jones Industrial Average: 86th record since Election Day and 69th under President Trump
The Dow has now matched 1995 with the most record closes in a calendar year, and I’m sure that record will be smashed. There was strength across the board with Costco (COST) leading the charge as consumer staples enjoyed the strongest sector gains.
|
S&P 500 Index |
+0.83% |
|
Consumer Discretionary (XLY) |
+0.77% |
|
Consumer Staples (XLP) |
+1.83% |
|
Energy (XLE) |
+0.54% |
|
Financials (XLF) |
+1.43% |
|
Health Care (XLV) |
+1.47% |
|
Industrials (XLI) |
+1.19% |
|
Materials (XLB) |
+1.04% |
|
Real Estate (XLRE) |
+1.41% |
|
Technology (XLK) |
+1.45% |
|
Utilities (XLU) |
+1.26 |
The Russell 2000 Index was the best performing sector, suggesting that the Street is buying into the notion this tax bill would have a positive impact on the domestic economy.
I think it’s interesting this market has many of the characteristics of 1995, which is the year Alan Greenspan coined “Irrational exuberance” that marked the top of the market five years too soon. Right now, equity valuations by most measures aren’t near levels that typically trigger crashes.
The renewed optimism is just getting started, and shouldn’t die overnight because of political anxieties. New highs beget new highs; this time, these milestones are happening in accordance with good to great news. There are real building blocks for a real rally.
Speaking of exuberance, after the close, TD Ameritrade (AMTD) announced it will offer clients access to the Chicago Board Options Exchange (CBOE) Bitcoin (BTC) futures contract as of today.
Today’s Session
The market is ready to burst out the gate with gusto as most of the tax loss selling is probably finished (I hope you have consulted your own CPA about the benefits of closing losers – we will have some this week.)
It’s widely believed the GOP tax bill will pass tomorrow. Now, the realization of instantly higher earnings per share, more funds to invest, and even higher wages down the line are seen in equity futures this morning.
The noise is being drowned out in part because it’s ridiculous.
I would have made corporate rate 23% and given a little more to the Middle Class, and I would have made repartition tax much lower. But, Republicans tell me it’s going to go away completely, soon. Since the median home price is $247,000, the overwhelming majority of homeowners will keep their deductions.
Even in California, the median price is $546,430, so only the super wealthy there will pay more. Net/Net this is a populist tax bill and victory for middle America and households struggling to find work.
| Comments |
| NO, because being an elitist these days means nothing in my opinion. We should all be happy and content we are living a good live, and if somebody, many others, have more, FANTASTIK! Karin Pereira on 12/18/2017 9:46:01 AM |
| Conditions in our country favor the rich at the expense of our middle class and our poor. These conditions are a direct result of the Progressive Principles on Tax Reform. These conditions will remain as long as Progressives continue to block taxes as an economic tool! Harvey Stump on 12/18/2017 10:05:52 AM |
| Well, re: tax bill. I agree generally with your comment about adjusting for middle class; BUT I really think the upper 1% and those SALT folks are getting taken to the woodshed (disclaimer: I'm not in the 1% and live in Florida). That's where I think the GOP has missed the boat by buying into class envy the dems are pushing (actually trying to shore up middle class votes). The benefit to middle class is negligible IMO. The 1% pay yuge % of tax bill anyway. Robert Waddell on 12/18/2017 10:05:59 AM |
| I would have done some things differently. No doubt this isn't your father's GOP with that massive child tax credit and big refundable part but its going to help the overall economy and that's the best news. A perfect bill with so many entrenched interest and two vote margin in Senate was a pipe dream...its a major win to get something this comprehensive only took 31 years. CP Charles Payne on 12/18/2017 10:15:35 AM |
| Conditions in our country favor the rich at the expense of our middle class and our poor. These conditions are a direct result of the Progressive Principles on Tax Reform. These conditions will remain as long as Progressives continue to block taxes as an economic tool! Harvey Stump on 12/18/2017 10:07:26 AM |
| Hell NO kev on 12/18/2017 10:08:31 AM |
| There was a reason Pelosi was nicknamed BS when she was Speaker. I have yet to hear of her saying anything close to truth, or even coherent and logical. The Obama approach, which is the same as the Pelosi approach, produced HUGE gains in income disparity. An entitlement or socialist system will always make the poor worse off by making them less employable. The corporate tax cuts will likely end up funding reeducation programs so businesses can create more employable workers to fill their needs. The individual tax cuts naturally favor the more wealthy, since the less wealthy are the ones not paying their fair share (or any share at all). Bob on 12/18/2017 10:14:33 AM |
| No I do not believe Nancy, I think this will stimulate the economy even more if they actually pass it. I also believe if they do not get this done election time is going to be very bad for republicans. Elizabeth on 12/18/2017 10:52:03 AM |
| Nancy and the "Dims" are nuts. This new tax bill is not all I wanted, but is a huge step in the right direction! Dan Cooney on 12/18/2017 12:09:56 PM |
| No tax bill is not perfect but is a major advance. Democrats are lying as usual. John Perry on 12/18/2017 12:24:11 PM |
| It certainly is not the best bill, but overall it is probably the best that was achievable. The sad part is that Dem senators in the red states appear unwilling to break from their ranks and vote for it. Obviously their votes are not necessary, but it certainly demonstrates their desire to be obstructionists. As the economy continues to boom, especially with the injection of this bill, the average Joe will see an improvement in income and decreases in taxes. Thus, they will be likely to vote for a continuation of this growth and I would venture to say the midterms will bode well for the GOP. The elimination of the Obamacare individual mandate in the tax bill is going to have far reaching effects as well. Though many of the healthcare stocks may take a hit with the repeal, those healthy individuals are going to see additional money in their pocket and it will allow them to make individualized choices in the their healthcare expenditures. I would expect to see a somewhat bipartisan infrastructure bill next year which should spur more growth and add additional stimulus to stocks such as CAT, URI, X, and other industrials. It's definitely an exciting time to be an American and particularly an investor in America! Philip Morris on 12/18/2017 12:37:57 PM |
| Please do not include my email. Ok let’s deal with the perceived notion of the given inequality. It is inequality to take more from one than another? If so then we already have a graduated tax system. That would be unequal. That said we must not be talking that, so instead we asked a question about a perceived notion from one of the power hungry? I don’t think I have much to say about it as it is a stupid premise. A tax break is good sign as it about making the Government’s footprint of power much smaller and its burden on all of us smaller and that is totally awesome. Gale on 12/18/2017 1:31:38 PM |
| I challenge Pelosi et al to show me a socialist country that does not have a YUGE income disparity also. It's human nature that some get more than others no matter what the system. Just look at Pelosi herself. Dick on 12/18/2017 2:17:29 PM |
| I just hope the corporate leaders use the windfall they are going to to to reinvest in R&D, P&E and people not just themselves. Terry Terrell on 12/18/2017 3:18:00 PM |
| It's FINALLY coming to pass that ALL Americans will soon be receiving a "tax break." Ms. Pelosi and her ilk wish to degrade and criticize ANYTHING the Trump Administration might do that is POSITIVE for this country and it is my "CHRISTMAS WISH" that Santa will bring her a bag of coal for all her deeds this past year. James Warlin on 12/18/2017 3:52:54 PM |
| Elitism is a core principle to the San Francisco political nobility. This decades-overdue tax reform presents a threat to the exclusivity of clubs like theirs. Patricia Flynn on 12/18/2017 4:10:55 PM |
| Hell-o---------- BIG-BOYS---- N---BIG GIRLS-------- i am a in favor of anything to get people to try and help themselves and advance into whatever "CLASS" they may want. Pack a lunch take your tools and show-up at the job you want before starting time ----- You could get a-head in this world--- or sit back and complain. This message from a P-ON who did just that ----packed a lunch and raised 2 boys in the 80's with an up-word economy. Carpenter by trade ---- still a P-ON. John on 12/18/2017 5:14:53 PM |
| Nancy's playing her "mind" games again. She, and every 'progressive' decry the rich for not paying higher taxes. The GOP plan actually slams the top 2%, by disallowing state-tax deductions. It SHOULD be just what the Dems want .... unless of course they live in Blue, high tax states (LOL). Joe Branka on 12/18/2017 7:22:06 PM |
| It's just like she has not read the bill. Must be getting all her info MSM. Just remember she supports the FBI or Feckless Brutes Ignoring. Phillip Engel on 12/19/2017 9:19:07 AM |
| SUCCESS IS NOT A ZERO SUM GAME! I would have preferred to have the SALT deductions retained. I believe that money paid to the government should not be taxed by the government. That said, I think that the bill is a step in the right direction. Jerry Turner on 12/20/2017 11:28:40 AM |
| Pelosi is again telling falsehoods! I believe this tax reform will be similar to Reagan's tax reform...will be good for the middle class and business. Dee Hill on 12/21/2017 7:39:50 PM |
| Was this an issue during the 50s, 60s, and 70s? Having grown up during that period I do not think so. Back then the U.S. government invested in infrastructure, the frontiers of science and engineering and most importantly in the development of people. During this period there was an explosion of scientific discoveries and seminal inventions that we still incrementally improve upon to this day. Back then, our public education system at all levels trained the workforce of the future. Today we have to import people to fill jobs in the industries we created. This has created a permanent underclass in our nation. Exacerbating this has been a 65% unabated decline in government-funded R&D as a percentage of our GDP since 1967. This is huge! Our politicians have made the explorations of the frontiers of science and engineering much less relevant to economic growth by taking from our future to pay for present needs. We need to get back to policies that were measurably effective in creating the modern world and that made our nation a world economic and military power. We are consumed by short-term thinking, which will result in limited opportunities for growth and eventually lead to stagnation. Tax cuts and reform are not the policies that created the modern world or the way our nation became a world economic and military power. At best this is a temporary fix to the divide our politicians have created over a 50 year period. John Parmentola on 12/29/2017 10:23:05 AM |
| I watch you every night I am home. You are an idle of this old white man. Ed Miller on 12/29/2017 6:54:09 PM |
| Nancy Pelozi is the elitist dressed in sheep's clothing. Dante Alanis on 12/29/2017 9:36:47 PM |
| I’m thrilled the President was able to get a tax bill passed at all. I’m a middle class widow and am happy to be ahead by anything. I don’t, and never have, begrudged the upper 1% of this country. They earn the majority of money & pay the majority of taxes. I’ll be happy for myself if I make out in this new tax bill, who can complain if your several thousand dollars richer than you would have been if nothing was passed. Also, corporations must come back to the states and if lowering their taxes is the way to go then it must be done. If I was a business owner and was better off in Ireland or India, I’d say “goodbye USA” also. Maureen Doran Kocka on 12/30/2017 5:07:41 PM |
| the situation between repub and dems is a disgrace. john benanti on 1/1/2018 1:53:05 PM |
| No I dont. I think it is going to force those states to take a real hard look at their over spending and corruption the taxpayers are going to force their hand. Elizabeth on 1/2/2018 10:43:23 AM |
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