From a Friend – Subject: Ross Rant
Dec 22, 2017
Now that the tax bill is about to be law, corporations will be revising their forecasts and earnings guidance. When earnings are released in Q1 2018, guidance will be increased by many companies to account for a combination of the tax reduction and GDP growing next year at 3-3.5%. It is very possible that Q4 GDP is growing at 3.5% to 4%. There will also be dividend increases as well as new investments. Taken together, there will be a nice boost to the stock market in Q1.
More companies will be announcing bonuses and minimum wage increases, as well as new capital expenditure. I don’t know, but it would not surprise me to learn that CEO’s of many large and mid-sized companies have all spoken and agreed that they need to do these things to convince voters the tax reform was really beneficial to middle and lower class workers, and the benefits do flow to labor.
I suspect they know the Dems and the press will continue to claim the tax reform is all for big corporations and the wealthy, so they need to prove otherwise, or risk the Dems getting control of Congress in November. If a lot of companies do pay bonuses or otherwise increase wages, the Dems lose in November. There will also be more announcements of new facilities being developed in the US instead of offshore. While dividends will be increased, that flows to the 45% of workers with a 401K who are already happy with the performance of the stock market. CEO’s are not stupid.
They know there is a PR war going on to prove the tax bill really benefits workers, and they will do things to make it so. One of the unintended benefits of Trump and the stock market rally is that grossly underfunded pension funds, mainly those for government workers, are now earning way above their target rate of return and this will help fill the gaping deficits. There is still a pension crisis coming, but it is going to be less than it would have been and a little further down the road.
The Dow is up around 25% and the S&P 500 is up 20%. It has been a great and near record year to be in stocks. 2018 should be more ups. Bitcoin is now beginning to show how easy it is to get killed investing in it. Stay away from all the crypto currencies. It is all lunacy. Don’t confuse blockchain with Bitcoin.
Blockchain is just the underlying technology that makes Bitcoin work, and is completely separate, and it is legitimate. Blockchain will be a major software system used by banks and many other fully legitimate institutions in the future, and it has nothing at all to do with Bitcoin. It is only about record keeping for transactions.
The return of cash held offshore is likely to begin early in the year and that will also be a plus for stocks and the US economy. The taxes collected for that will potentially help fund infrastructure investment. Not only does that help the economy, but it helps productivity by improving roads, airports, and other similar things.
The loser in this is Ireland which will no longer see the major influx of US companies and the tax income they enjoyed from that. Despite all the crap you hear in the media and from Nancy and Chuck, the tax bill really will make a major good difference to the US economy, which is why those two have ramped up the attacks to a level of absurdity. It is going to be very hard for the Dems to campaign against the tax bill in November when workers see more money and higher wages.
GDP growth and historically low unemployment will be hard for them to counter. What are they going to say- elect us and we will raise your taxes? The Republicans are right, once the money starts to show up in paychecks and wages are increased, the bad polls will turn good.
Given the political issues in Europe, Brexit, and high energy costs, this will likely cause companies to find the US much more attractive as a place to do business with dramatically less regulation and low taxes, and much lower energy costs, to be the place to have their companies.
The US is getting rid of regulation while Europe is ramping up tough regulation out of Brussels and Macron wants far more control by Brussels. Europe is doing things that make energy more expensive, and the overall cost of doing business higher.
It is pretty clear now there is no case for collusion by Trump nor is there any case for obstruction. Even Adam Schiff has stopped making up fake news stories. It is equally clear that there was a major collusion by Clinton, Wasserman and aided by Lynch and top level FBI officials.
It is a fact that Clinton paid for the “dossier”. It is fact that top FBI officials colluded among themselves to try to keep Trump out of office and help Hillary by rewriting the Comey press event to extremely careless from Gross negligence. Those are established facts now.
It is also clear that Obama made sure the DEA and CIA could not pursue the case against Hezbollah in order to curry favor with Iran who specifically asked that the US back off. It is also a fact that Susan Powers requested unmasking on over 200 names for no reason to do with her job.
It is a fact supported by Donna Brazille that Clinton likely broke campaign finance law by laundering contributions through state party groups and back to her campaign. It is yet unclear what the real story is on uranium, but supposedly there is an informant who has proof of bribes. On it goes. Come early next year, Mueller will find there was no collusion, Trump will be vindicated and Republicans will have ramped up the investigations of all the Clinton and Obama misdeeds.
Each day just makes it more likely that my prediction that the Dems will be sorry they ever started this will come true. By spring there will likely be a full scale scandal revealed about what Clinton, the FBI officials and Obama did, and the whole Dossier story. This is going to be ugly and the Dems will no longer be able to try to sell the fable that the Republicans are just trying to hide the Trump collusion.
None of this is stuff I made up. It is all out there publicly and with evidence to back it up. As I have said from day one- ignore Trump the person and his tweets and watch what his cabinet makes happen. The policies are beginning to take effect and the results are being shown by market investors and corporations putting their money behind the policies. That is what matters. When people and companies put their own money behind something, that is real, as opposed to all the noise in the media and from Nancy and Chuck.
The tax bill passing is going to be shown to be the turning point politically. It got done and the Dems get no credit. The Mueller investigation is going to clear Trump. The government did not shut down. GDP is growing faster than any time in 10 years. And now the focus is shifted to Hillary, Obama and the scandals they created. Instead of all the focus being on collusion by Trump and Republican failures, it is shifting to the scandals of the Dems, and the economy is humming.
Merry Christmas and have a great holiday. 2018 is going to be another great year to make money if you are all in stocks.
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