Over the last few months we have argued that Trump's ""Phenomenal" tax cuts are dead on arrival.
- Why Trump’s Tax Cut Bill Is Now A Legislative Impossibility
- Quick Reminder: Earnings Need Trump's Phenomenal Tax Cut Or The Market Crashes
And that was before North Korea, Comney and an all out media/political war Trump has gotten himself into. Now we get this....
- Republican Hopes for Rewriting Tax Code in 2017 Are Fading
- It's so unfair! Trump claims 'no politician in history has been treated worse' in commencement speech to Coast Guard recruits after coming under fire for leaking intelligence and interfering with a FBI investigation
YES, fight he will, but that is no longer relevant. As David Stockman so often says, there is "no snowball's chance in hell on a hot day" that Trump's healthcare bill will pass, let alone his ambitious tax cuts. As Trump's impeachments odds show, he will be lucky enough to survive his first term, let alone pass anything in today's openly hostile Republican and Democratic Capital Hill.
And that begs the question......if Trump's stimulus is nothing but a pipe dream, what the hell is the stock market doing at today's valuation levels? And if he fails, will the stock market retrace below 2016 lows?
Well, first, allow me to remind you that Shiller's Adjusted S&P P/E Ratio is at 29. The second highest in history and right behind 1929 top (if we account for 2000 top distortions).
And if earnings are not surging higher, due to stimulus or tax cuts, prices must come down. Even crash. At that juncture it wouldn't be a question of "IF" Trump's rally gets retraced, but rather, where will the bottom be.
If you would like to find out exactly what happens next based on our Timing and Mathematical work, please Click Here.