Are Tax Cuts Baked In The Stock Market Already….?

Oct 21, 2017
J. Webster
Comments Off on Are Tax Cuts Baked In The Stock Market Already….?

The stock market doesn’t go down anymore. It only goes up and up and up. Trump trumpets this nearly every day. So when the taxes cut come, or if they don’t come, what does the stock market do? If the tax cuts come, they’re able to get passed, does the stock market drop, since it’s already baked in the gains so far this year? Sell the news. If the taxes cuts don’t come, does the stock market crash? You’d think it would. Just because of the run up this year so far. And that’s what Steve Mnuchin is saying.

What’s more, if they’re able to pass something they brings some of the money back to the United States that’s parked overseas, does the market go up even more or is that too baked in the gains that have come? It’s hard to say. The economy is strong. And then Christmas is coming soon, the market always goes up ahead of Christmas, right? The gains in the market also help everyone who is in the market, so that helps the economy too. But what’s hard to say it just how much all of this is already “in” the market. Baked in. Cooked.

The other element of the stock market that’s now in play is who will be the new chair of the federal reserve? Will Janet Yellen stay? Will the new fed chair raise interest rates at a faster rate…?

And there’s always the element of a surprise, whether that’s related to North Korea or a terrorist attack or a natural disaster that effects the economy and thus the stock market. With the market so high already, any outside element that will surprise or slow the economy will surely cause the market to drop. It’s not like there’s blood in the streets right now and everyone is afraid of buying stock like back in 2008. As Buffett always says, buy when others are afraid.

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