Veteran financial guru and former Ronald Reagan adviser Larry Kudlow told Newsmax TV that the bull stock market raging since Donald Trump’s victory is far from over.
“I'd stay with the Trump bull market,” he told “America Talks Live."
“But remember this, behind the Trump bull market is an unexpected surge in corporate profits, which is the mother's milk of stocks,” the Newsmax Finance Insider told host Steve Malzberg.
" I think the foundation from rising profits is great and I think the expectations of Trump getting his pro-growth tax cut plan is great," Kudlow said.
Major Wall Street indexes have rallied to record levels since the election of Trump as U.S. president, boosted by pledges of tax reforms, reduced regulations and increased infrastructure spending, Reuters reported.
The benchmark S&P 500 has surged 10 percent since Trump's Nov. 8 election, with optimism running high over the Republican administration's domestic proposals, including plans to reform taxes paid by businesses.
But there have been few specifics so far, and some investors believe Trump may need to provide more than just generalities when he gives his first major presidential address on Tuesday to Congress.
"If he comes out next week and there are little or no details other than that it is going to be great, that is going to be a time where we could have the first sort of crack in the armor," JJ Kinahan, chief market strategist at TD Ameritrade in Chicago, told Reuters.
Trump has said enough so far to help propel major stock indexes to all-time highs. The Dow Jones Industrial Average this week marked its longest run of consecutive record-high closing prices in 30 years.
With stock valuations expensive, many market participants are bracing for a pullback. The S&P 500 is trading at nearly 18 times forward earnings estimates versus the long-term average of 15 times, according to Thomson Reuters data.
Meanwhile, Kudlow also urged Trump to quickly enact corporate tax cuts before any other reforms in order for economic growth to truly flourish.
“I think it should be the number one legislative priority,” said Kudlow — host of "The Larry Kudlow Show" and author of "JFK and the Reagan Revolution: A Secret History of American Prosperity," written with Brian Domitrovic and published by Portfolio.
“I believe the economy will immediately, and I mean immediately, take hold of these new incentives and start a rush up like we haven't seen in many years,” said Kudlow, a radio talk-show host and CNBC senior contributor.
U.S. Treasury Secretary Steven Mnuchin said on Thursday that he wants to see "very significant" tax reform passed before Congress' August recess and that the Trump administration was looking closely at border tax issues.
"We are committed to tax reforms ... We want to get this done by the August recess," Mnuchin told CNBC, in what was his first interview since taking office last week. "We've been working closely with the leadership in the House and the Senate and we're looking at a combined plan," he told CNBC.
Kudlow urged Mnuchin not to wait. He said the corporate-tax angle should be broken off from the rest of the reform package and dealt with before anything else.
“If you're targeting August, the likelihood is you won't get there until the end of the year at best and it could even be 2018. If that happens, it will slow the economy. People will postpone their activity and their investment,” he said.
Otherwise, Kudlow sees Trump's plan to "Make America Great Again" slowly coming together.
“I think the president's executive orders to roll back onerous business regulations is absolutely terrific, first rate,” he said. “That is really pro-growth,” he said.
Trump signed an executive order on Friday to place "regulatory reform" task forces and officers within federal agencies in what may be the most far reaching effort to pare back U.S. red tape in recent decades.
Trump earlier in the day signed the directive in the Oval Office with chief executives of major U.S. corporations standing behind him including Dow Chemical Co., Lockheed Martin Corp. and U.S. Steel Corp. The sweeping order directs every federal agency to establish a task force to ensure each has a team to research all regulations and take aim at those deemed burdensome to the U.S. economy and designate regulatory reform officers within 60 days and must report on the progress within 90 days, Reuters reported.
"Excessive regulation is killing jobs, driving companies out of our country like never before," Trump said before signing the order. "Every regulation should have to pass a simple test; does it make life better or safer for American workers or consumers?"
The effort is part of a Republican push to undo many of the actions of former President Barack Obama, who left office last month after two four-year terms.
Meanwhile, Kudlow cautioned that fine-tuning all the details in Trump's grand plan may be an arduous process.
“You can't wave the magic wand. I mean I have been through this process when I worked with Reagan and other presidents,” he said.
“The White House has to sit down with the congressional leadership and map out a strategy and they haven't done that. That doesn't mean they haven't had sit-downs. It does suggest to me that they had not reached conclusions about the legislative order of these major ideas and if it were me, I'd be more interested in economic growth,” he said.
To find out more about Larry Kudlow and read features by other Creators Syndicate writers and cartoonists, visit the Creators Syndicate web page at www.creators.com
(Newsmax wire services contributed to this report).
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