Some things to think about/Some earnings comments/Some data

If there is one thing that anyone involved in markets gets to know is that markets sometimes don't always reflect the economy and the state of the economy at times separates itself from markets. How many times have we seen stocks rally on disappointing economic data on the belief it would give us a Fed rate cut? And vice versa? Also, markets are sometimes dispassionate but other times highly emotional. They don't care what you think, they don't care about your politics, they don't always do what you think they should and much more often than not, it does the opposite of what most people think it will do.

I say all this as we digest the likely incoming policies of Trump 2.0 which from an economic perspective, business should benefit greatly on the regulatory side in relieving its seemingly nonstop intense pressure, particularly on small business. On the tax side, a 21% corporate tax rate remaining in place (will be tough to lower further though I wish it did in order to better able US companies to compete globally and the corporate taxes are passed on to consumers anyway), along with the extension of the expiring tax legislation of the TCJA will meet up with the desire for tariffs, aka taxes that someone has to eat. I'm stating all the obvious things to think about but want to bring this all together.

We have had bull markets most of the time and under both Republican and Democratic presidents. We've had bear markets under both Republican and Democratic presidents too. And market behavior under either administration many times is just a victim or beneficiary of circumstance. Quickly on this, George H. W. Bush was unlucky becoming president after a long Reagan expansion and a recession and a bear market came on his watch. Clinton was lucky to be elected just as the recession was ending and benefited too from the epic tech stock bubble that happened to crash on George W. Bush's watch who then devastatingly presided over 9/11. He then experienced an economic recovery but ended his presidency with the housing market crash that Obama was lucky enough to have caught the bottom of when his presidency began. Trump 1.0 saw a pick in growth post Obama and the sharp corporate tax cut but ended with the disaster of Covid 19 that Biden was fortunate enough to have been president with the reopening and recovery. Inflation though, self- inflicted, was the curse of his administration but yes, sometimes being in the right place at the right time dictated market performance and vice versa.

All throughout too, we have had a growingly active Federal Reserve that continued to flex its monetary muscles and it itself became a major factor in how the economy and markets behaved, both in blowing bubbles and then figuring out how to recover from the aftermath.

Bottom line, the US economy will hopefully be helped by business supportive policies (tariffs are up for debate though and I still don't like them as I think the negatives outweigh the perceived positives) but we still must be thick skinned as living in markets we know s**t happens and other factors sometimes drive the bus. High valuations along with higher for longer interest rates will be the current administration's challenge when it comes to market's I believe.

To some earnings comments.