In the interest of full disclosure, I know a lot more about baseball than the stock market. Nevertheless, you have to say that Wall Street has a good case of “love at first sight” with the new GOP bill.
U.S. stocks traded sharply higher on Monday as investor sentiment was boosted the Senate narrowly passing a major tax bill over the weekend.
The Dow Jones industrial average rose 230 points, with Boeing and Walt Disney leading advancers on the 30-stock index. The Dow also hit a record high and briefly traded more than 300 points higher.
The S&P 500 gained 0.4 percent, with financials and industrials as the best-performing sectors, rallying 1.9 percent and 1.6 percent, respectively. The index also reached an all-time high.
The Nasdaq composite lagged, trading 0.6 percent lower as Facebook, Alphabet and Netflix all traded lower.
“You’re seeing tech lagging and financials leading. This is some rotation on the back of the Senate vote,” said Lindsey Bell, investment strategist at CFRA.
Well, so far so good, as most mothers would say when they meet the nice young man who is dating their daughter.
The real test is coming in the summer of 2018.
We can see two scenarios by Labor Day:
The first one is that the economy slows up and we are talking “recession” again. We are already hearing the “R word” from Governor Jerry Brown of California. He was rather pessimistic about the economic future of his state. A slowdown in the Golden State could hurt the other 49.
The second scenario, and the one that I envision, is that the U.S. economy will be boosted by “confidence” and “growth”. We have already seen quarters of 3% GDP growth and could see something closer to 4% by next summer.
The story is that President Trump and the GOP own the economy now. I feel good about that but only time will tell how it all turns out.
Tags: The US economy and the tax plan To share or post to your site, click on "Post Link". Please mention / link to the My View by Silvio Canto, Jr. Thanks!
