What Has Happened to Wall Street?

Posted: Mar 19, 2018 11:49 AM
The opinions expressed by columnists are their own and do not necessarily represent the views of Townhall.com.
What Has Happened to Wall Street?

It’s amazing to see that politics seems to be the main concern of the markets. What happened to the fear of inflation and interest rates? Think about how much things have changed. For weeks, we have seen nothing but good news continuing to come out in the markets. Last week was another great week of 50-year lows in unemployment, job openings for the month of January were at historical levels, consumer confidence is the best it has been in 14 years, manufacturing in two very important areas—New York Fed and Philly Fed—are off the charts, and we should be still riding the wave of the recent addition of 313,000 private-sector jobs, not to mention an uptick of 803,000 in labor participation. 

I find it amazing that markets are pausing because we are worried about politics and messages coming from the mainstream media. I understand that Chief Economic Adviser Gary Cohn leaving is something that could rattle the markets, because that could directly impact the direction of the economy. But that is in the past, was remedied quickly, and in my opinion, just got better with the naming of Larry Kudlow. 

Kudlow is clearly a free-market capitalist and a strong-dollar economist who has the potential of influencing the economy in a very positive direction. I think about other personnel changes that everyone is stressing over and, at this point, the cause of the reaction is the absolute disdain for anything President Trump does. Will it really impact the underlying fundamentals of the economy? I don’t think so. Unfortunately, I’m old enough to remember the day when my sanctuary away from all the noise of politics was economic fundamentals. Technically, the only worry was about some geopolitical event occurring or an interruption in the flow of oil; politics wasn’t on the list. 

We were just spared from eight years of an administration in which every action affected the economy—each action taken demonized profits, vilified corporate America, apologized for America’s exceptionalism, despised Wall Street and “fat cat bankers,” and was seemingly bent on creating enough regulatory burdens so that fossil fuel companies and banks would either be put out of business or end up totally under the thumb of federal government. 

Now, we have an economy led by an administration that is the polar opposite of what we've had for the past eight years. Do you remember all those things we dreamed of? Our dream has finally come true. We should be excited, enthusiastic and even celebrating the platform this administration has built—one that is moving the economy forward. Yet instead, traders are stressing over politics. It’s as if some are just incapable of looking, studying and celebrating the real underlying fundamentals of this economy

I will be the first one to say that President Obama and his administration had the dramatic impact of crushing the underpinnings of the U.S. economy. That was then; this is now. Let’s return to the logical basis of understanding that growing a strong economic foundation will lead to certainty, freedom from false positives, and a bright and strong future for the markets that will surely follow this period of economic strength.