- Cantor Fitzgerald CEO Howard Lutnick predicts continued growth for the stock market into 2018, after an initial adjustment period during which businesses grow accustomed to tax reform.
- Lutnick doesn't anticipate the Federal Reserve hiking rates beyond 2 to 3 percent.
Despite some bumps in the road during the first few quarters, tax reform will ensure a positive market for the foreseeable future, said Howard Lutnick, CEO and chairman of Cantor Fitzgerald.
"Right now there's not any clouds on the horizon, it feels really good. They just empowered every corporation in America to make more money," Howard Lutnick said on CNBC's "Fast Money."
In the aftermath of President Trump's election, Lutnick called the bank rally, predicting that loosened regulations would stimulate growth and benefit the economy all around.
Lutnick is still bullish on the implications of deregulation. Now he's saying, with added corporate tax cuts, the market is going to keep pushing on upward, after some initial bumps due to fear of the unknown.
"People are worried, people are scared, they're just not used to a 14 percent corporate tax cut," Lutnick said.
"People are focusing on the fact that they've got to repatriate some money from overseas, so it looks bad for a quarter or two. You know what, once that quarter or two is passed and the earnings pound forward, you're going to continue to see a positive market," he added.
Despite his bullishness, Lutnick doesn't think the rally will translate to increased demand for various lines of bank business, for example, increased demand for loans.
"I don't buy you're going to see new loan growth. I never bought that stuff. What I see is, the financial institutions are going to make more money, they're just going to make more money," he said.
As for market disruptions, Lutnick sees none, barring exogenous factors, like run-ins with North Korea. Even Federal Reserve rate hikes won't get in the way, according to Lutnick, so long as they don't surpass the 2 to 3 percent he anticipates.
"To harm the stock market, you need to see a huge bump in the interest rates...and that requires a busting economy. So why would a busting economy, which would move interest rates, be bad for the stock market? The problem is, it's not there," he said.
"I think what you're in is a market like we were in last year, which means good things are underlying and there's no clouds," he added.