Quick Reminder: Earnings Need Trump’s “Phenomenal Tax Cut” Or The Market Crashes
While we applaud President Trump for finally firing FBI Director Comey, Trump Throws Out Bum Comey, the above might be terrible news for the stock market.
And without tax cuts corporate earnings are at the end of their rope.
As we have discussed so many times before, most growth off of 2009 bottom has been driven by QE, zero interest rates, stock buybacks and general economic growth caused by stimulus.
Take this stimulus away and earnings collapse. Simply put, the US Economy and markets need yet another stimulus shot just to keep going. This shot was touted as Trump’s “Phenomenal Tax Cut”, leading to a post election rally in stocks. Take it away and stocks should collapse.
We are already beginning to see evidence of that with numerous companies missing their targets and lowering forward guidance. For instance, IBM just missed and is down 5% in the afterhours IBM posts first revenue miss in five quarters, shares tumble
Our view remains the same……
- Here Is Why Trump Will Fail To Increase Earnings
- Will Earnings Catch Up -or- Will The Market
- Find Out Why Trump’s Tax Cuts Are Bound To Fail
Not a good sign when the stock market is selling at the second highest valuation in history.
If you would like to find out exactly what happens next based on our Timing and Mathematical work, please Click Here.