Market strategist and Newsmax Finance Insider Ed Yardeni predicts the bull market is far from over and the S&P 500 will spike nearly 6 percent to crack 2,500 by the end of the year.
"The stock market seems to be tuning out all the noise and [is] kind of focusing on what investors think is the underlying signal coming out of Washington," Yardeni told CNBC.
"That is with a Republican president and a Republican Congress, it's very likely that of all the things that the administration has proposed, tax reform, including tax cuts and repatriated earnings, are the most likely programs to get through," the president of Yardeni Research said.
In the "bullish scenario" that sees the president "fast-track tax cuts, tax reform, repatriated earnings and deregulation ... stocks would certainly move to new record highs for a while simply because earnings would rise sharply," the Newsmax Finance Insider said.
At the same time, Yardeni acknowledged that Trump's "protectionist language has been of concern," and could ultimately lead to big trouble for stocks.
Still, the good news for the market is that the economy overall has strengthened, meaning that equities are on somewhat firmer ground — particularly given the recent recovery in the oil patch.
"Energy is no longer weighing down on overall corporate earnings, and corporate earnings are doing remarkably well especially in the face of a strong dollar," he said.
Stock indexes inched ahead to record highs Friday, barely, after a late-afternoon push erased losses from earlier in the day. It caps the fourth straight week of gains for the Standard & Poor's 500 index, its longest such streak since July.
On Friday, the Standard & Poor's 500 index rose 3.94 points, or 0.2 percent, to 2,351.16. For the year: the S&P 500 is up 112.33 points, or 5.0 percent, the AP reported.
While many of his campaign vows have yet to be fulfilled into presidential accomplishments, Trump will be a demanding leader who applies the best of his negotiating skills to push for U.S. growth, bestselling author David Horowitz told TheStreet.com.
Trump won’t be an ideological purist like Republicans who support free trade but don't fight for fair trade, Horowitz said.
“If you just say, ‘well we're for free trade and we're not going to look at the deals that we make’ -- that's not a good idea,” he said. “We've had an anti-business president now for eight years who doesn't take a hard-nosed attitude towards these deals. Trump is going to get better deals for us, which is still free trade.”
Horowitz's new book, "The Big Agenda: President Trump's Plan to Save America," reveals Trump's "first 100 days strategy" to roll back Obama's legislative and executive record.
“If the economy grows as it will under Trump, there's going to be a lot more money to spend,” he said.
"Big Agenda: President Trump's Plan to Save America" is available at bookstores everywhere – or get your copy on Amazon – Click Here Now
However, fellow Newsmax Finance Insider Hans Parisis contends that the Federal Reserve seemingly appear to doubt Trump's tactics. The nation's central bank actually sidestepped many potential economic landmines in its first statement of the Trump presidency, Parisis wrote in a recent blog.
Parisis recently noted that the statement from the FOMC did not go into any of the potential controversies that may plague the Fed over the coming months:
- The balance between quantitative and monetary tightening;
- The necessity of offsetting any regulatory easing with quantitative and monetary tightening;
- The necessity of countering any fiscal easing with policy tightening and how to handle the inflation implications of the muted Trump import tax on consumers by tariffs.
Dr. Ed Yardeni is the President of Yardeni Research, Inc., a provider of independent global investment strategy research.
(Newsmax wire services, Reuters and Bloomberg news contributed to this report).
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