Potential for Massive Upside--6/2/2016
As I mentioned in my last note, given the amount of people under-weight equities, there is a Bearish Vibe in the market. And, as I discussed, this can set the stage for a major rally if good news hits the markets. Why? Well, the people under-weight stocks will need to get back in the market to take advantage of this good news. But since they are so under-weight, the buying will be BIG as they not only need to buy enough to get to equal-weight they also need to buy more than that to go over-weight and beat the market to the upside. (side note: in the week and a half since I posted that update, the S&P 500 has already moved up a little over 2.6%)
Well, there is another POTENTIAL big catalyst for upside stock market movement. Art Laffer pointed it out today on Fox News as he mentioned that Larry Kudlow and Stephen Moore are working with Trump to advise on economic policies. He mentioned that if Trump wins, there is a possibility that he and his team could cut the corporate tax rate to 15%, repeal Obamacare AND Dodd-Frank.
It is my opinion, and Mr. Laffer's as well, that if these things are done, the U.S. stock market might see some very serious buying as the boost to companies bottom lines from these moves could be HUGE, as Mr. Trump might say.