|I think the market has been in euphoria since Trump was elected. He ends trade agreements, starts tariffs, threatens nuclear war, and was accused of two felonies and the market didn't care. There are two possible reasons; 1) no one takes him seriously or 2) euphoria. |
Of the 16 largest banks, nine out of every $10 of earnings came from tax cuts (bank loans from the day Trump was elected until now are below). On top of these less than stellar bank numbers, Trump and the gop added nearly $2 trillion to the debt after CEOs begged for a bailout. None of them asked for or knew the cost of the tax cuts. I've never seen anything like it.
71% of CEOs want more tariffs on China and a huge majority want tariffs on more countries. Clearly they feel they don't have what it takes to compete with the rest of the world. So maybe we need a third option. 3) American CEOs are increasingly becoming incompetent.
I track the stock of the 101 highest paid CEOs. It's been red most of the year. That watchlist is now up 6.4% so far this year, far below the S&P500.
I also created a watchlist of CEOs employees pick as being great. That portfolio is up 38.57% so far this year. The best CEOs (employee picked) watchlist has only three companies in the red, GM, DIS, and COF. The best performer is SQ, up an amazing 126%.
The numbers I track suggest 3 is the most likely option. The tax cut and resulting debt, tariffs, ending free trade, and high paid CEOs not generating investment wealth are very strong indicators.
Btw, we've never had a recession with interest rates this low. If we watch rates, we'll know when a recession is about to hit. The Fed will lower rates a few months before the recession begins (or that's what they've done prior to the recent recessions - even the Great Recession). Rates aren't falling so we're okay.