INSUBCONTINENT EXCLUSIVE:
earnings estimates, perhaps, which have changed a lot during his presidency
Neither is perfect, but nor is any quest for science in the stock market.
Before digging in, acknowledge that stocks have enjoyed unusually
strong gains since Election Day, with the SP 500 rising at an annualized rate of 20 percent, crushing the historical return of 9.4 percent
At the same time, note the Trump return is only about 1 percentage point higher than the yearly gain since March 2009, an era mostly
overseen by Barack Obama.
Changes in earnings forecasts under Trump have been stark, compared with history
tax cuts, soared over the next two months, rising four times as fast as any period Bloomberg tracks
And companies made good: SP 500 operating income jumped 24 percent in each of the last two quarters and analysts see combined EPS of $159 a
share for all of this year.
Predictions for 2019 profits also soared, going from $163 a share at the start of the year to $177 a share now,
an upward revision that dwarfs any since at least 2012
Add to that a small bump in valuations: the SP 500 fetched 20.07 times annual earnings on Election Day 2016 and 20.7 times now.
So say what
Any one of those could easily eclipse anything having to do with corporate profits
investors might reasonably ask how much of the policy benefit would be rolled back if his presidency were threatened
There are two reasons why: 1) We have already gotten the best of his agenda -- tax reform and deregulation
Other elements of his agenda which he is currently pursuing, particularly his trade policies, are not supportive of growth and actually
worry many business leaders
2) Tax reform is the gift that keeps on giving
It will add to GDP growth for years to come -- in fact, the CBO projects it will have an increasingly positive impact on GDP growth in the
Also, if he were to be impeached, Mike Pence would assume the mantle and he has a strong track record of stimulating growth in Indiana
If the trade wars cool off a little this fall, we still think stocks can grind higher
With two more Trump associates now facing jail time, chances have improved that the House will flip back to the Democrats, who in private
concede that an impeachment debate probably will begin by late winter
In February 1974, when Congress initiated impeachment proceedings against Richard Nixon, the market was in the midst of a 1973-1974 bear
The SP 500 tumbled more than 30 percent through October that year.
In December 1998, when the House voted to impeach Bill Clinton, stocks
kept rising during the last stage of the Internet boom
in New York, and the index barely budged Wednesday in the aftermath of convictions of the Trump associates that sparked renewed discussion
Research, wrote in a note
