It seems stocks have nowhere to go but up.
From November 15th through Thursday’s close, the Dow Jones Industrial Average added 1,000 points and topped 24,000 for the first time ever. The Standard & Poor’s 500 tacked on 80 points (more than 3%), while the Nasdaq Composite index rose by 200 points to close above 6,900 Tuesday before retreating a bit.
Those gains were no doubt powered by Wall Street’s almost mystical belief in the healing powers of tax “reform,” which passed the House of Representative on November 16th. As I’m writing this Friday afternoon, Republican leaders were confident they had the votes to get this massive piece of legislation through the Senate.
This bill, which cuts corporate tax rates to 20% from 35%, eliminates the alternative minimum tax, and phases out the estate tax, is almost perfectly designed to help corporations, CEOs, family dynasties, and shareholders, both big and small. It probably won’t spur a lot of job creation, but all stock investors care about is boosting corporate earnings, which in turn power share prices higher.
So, now that tax cuts look like a done deal, can anything stop this market from going higher?