Authored by Lance Roberts via RealInvestmentAdvice.com,
Melt-Up Gains Traction Back in November, just following the election of President Trump, I wrote about the market entering into potentially the final ‘melt-up’ phase of the cyclical bull market.
However, while economic and fundamental realities HAVE NOT changed since the election, markets are pricing in expected impacts of changes to fiscal policy expecting a massive boost to earnings from tax rate reductions and repatriated offshore cash to be used directly for stock buybacks.
‘We expect tax reform legislation under the Trump administration will encourage firms to repatriate $200 billion of overseas cash next year. A significant portion of returning funds will be directed to buybacks based on the pattern of the tax holiday in 2004.’ – Goldman Sachs
This post was published at Zero Hedge on Oct 9, 2017.