Byron Wien: Trump is a disappointment, but here’s what’s saving stocks from a correction

It looks like investor hopes about President Donald Trump will go unfulfilled, but stocks will keep rising anyway, according to famed investment strategist Byron Wien.

"At the beginning of the year, I thought the Trump pro-growth program was propelling the market," Wien, vice chairman of the private wealth solutions group at Blackstone, said Monday on CNBC's "Trading Nation."

"But now, we have a situation where it looks like he'll get very little of his pro-growth agenda through, but earnings are coming in better than expected, and that's driving the market higher."

In other words, political optimism gave way at the same time that positive news about earnings was moving to the forefront of investors' minds.

The improving earnings picture "is keeping the correction from happening," Wien added.

With more than three-quarters of S&P 500 companies beating earnings estimates, earnings per share are on pace to rise by 15.2 percent, according to RBC Capital Markets. And analysts collectively see the rest of the year showing substantial growth as well. Even better, revenue has beaten expectations, providing what some argue is a stronger backdrop for earnings going forward.

"At these low interest rates, stocks are very attractive compared to bonds," Wien said. "If earnings keep increasing at 5 percent a year, then stocks are attractive on their own."

One of Wien's concerns, meanwhile, is that after moving from a positive driver to a neutral one, U.S. politics becomes a headwind.

"I'm worried that the Trump administration gets itself into trouble," he said. "Right now it's not doing any good, but it's not doing any bad either. So I'm just worried that there's a shift, and we lose confidence in Washington."

Wien continues to believe that the S&P 500 will rise to 2,500 this year, a prediction he made at the beginning of the year in his "Ten Surprises for 2017" missive.

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Trading Nation is a multimedia financial news program that shows investors and traders how to use the news of the day to their advantage. This is where experts from across the financial world – including macro strategists, technical analysts, stock-pickers, and traders who specialize in options, currencies, and fixed income – come together to find the best ways to capitalize on recent developments in the market. Trading Nation: Where headlines become opportunities.

Michael Santoli

Michael Santoli joined CNBC in October 2015 as a Senior Markets Commentator, based at the network's Global Headquarters in Englewood Cliffs, N.J.  Santoli brings his extensive markets expertise to CNBC's Business Day programming, with a regular appearance on CNBC's “Closing Bell (M-F, 3PM-5PM ET).   In addition, he contributes to CNBCand CNBC PRO, writing regular articles and creating original digital videos.

Previously, Santoli was a Senior Columnist at Yahoo Finance, where he wrote analysis and commentary on the stock market, corporate news and the economy. He also appeared on Yahoo Finance video programs, where he offered insights on the most important business stories of the day, and was a regular contributor to CNBC and other networks.

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