President Trump has made note of the record run in the market, suggesting that the administration's economic agenda is responsible for the strength in stocks. During a press conference on Wednesday, the president touted the Dow crossing the 22,000 milestone.
As is customary, presidents do get credit, and blame, for all that occurs on their watch. And, while it is true that expectations of fewer regulations, tax reform and infrastructure programs may have ignited the animal spirits of the stock market, those policy prescriptions have yet to become the law of the land.
With the exception of modest moves on the regulatory front, the president has suffered more policy defeats than successes so far in his time at the White House, or "a real dump," as the president reportedly referred to 1600 Pennsylvania Avenue.
Indeed, the administration may strain credulity when it takes credit for corporate profit growth, jobs growth and the global economic growth that, combined, have supported stock prices thus far this year.
The latest reported earnings show that S&P 500 companies have posted profit growth of nearly 11 percent in the second quarter. It is the second quarter in a row, in fact, of double-digit growth. That has not occurred since 2011.
Miraculously, the Dow is up 11.14 percent, year-to-date, in step with the growth in profits.
Tech earnings are up even more, about 14 percent, while the tech-heavy Nasdaq is up 18 percent, year-to-date.
Coincidence? I think not.
That stock prices and profit growth are growing in tandem is hardly a surprise, even if the growth of both may be surprising to some.
Revenue growth has also been supportive, with the top line advancing almost 5 percent in the second quarter, thanks largely to overseas growth and a weaker dollar, something for which the administration cannot take credit, though it may eventually bear some responsibility for a cascading currency.
Job growth has also been hailed by the Trump clan, but, like the stock market, the bulk of the gains occurred before this president took office. Again, there are scant few policies that have accelerated growth, or job creation, at least as yet.
One could make a convincing case that the economy, job creation — witness the offshoring of jobs at Carrier and Ford, two companies that the President purportedly had convinced to keep jobs at home — and stock price gains have continued to advance despite the actions of the Trump administration, not because of it.
The president complained in a recent tweet that the "MSM" (Main Stream Media) has not remarked upon the record run in stocks. That's hardly true.
It is safe to say that many observers have been shocked that the stock market has not suffered more than a 2 percent correction, peak-to-trough, so far this year, despite policy failures in Congress, chaos in the West Wing and rising geo-political risk all around the world.
It is quite difficult to predict whether further failures will lead to a meaningful pullback in the stock market.
Clearly, "repeal and replace," in the immortal words of Miracle Max, is "mostly dead."
Like health care reform efforts, we might get a "skinny tax reform" proposal rather than comprehensive changes to the code. Tax cuts, but no reform. And even that is suspect.
A large-scale infrastructure plan cannot occur without at least partial funding from repatriated corporate profits.
And further unfunded fiscal stimulus is unlikely to be welcomed by conservative members of the House.
It is often said that the stock market "climbs a wall of worry." It seems so here. And with a self-proclaimed builder in the White House, he has laid many bricks in that wall.
Happily, economic momentum is also building around the world, a foundation that is offsetting the weakening of the walls being built here at home.