, Columnist
Markets Show Ardor for Tax Plan in Stocks, Not the Dollar
Earnings and the economy remain the primary driver for equities, while events in Washington now appear to be more of a tailwind.
Where the action is.
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In a Dec. 16 Twitter post, the Nobel laureate economist and New York Times columnist Paul Krugman asked, “What does the market think about the economic impact of this tax bill?” He concluded by noting that “markets look extremely unimpressed.”
We had some sympathy for this view, noting that corporate earnings and a strong economy both in the U.S. and abroad were the primary reasons for the stock market rise. More recently, however, sentiment appears to have changed. Although earnings and the economy remain the primary driver for equities, events in Washington now appear to be more of a tailwind for markets.