In “The Bottom Line,” FreedomWorks Chief Economist Steve Moore discusses how the top 1% pay nearly half of all federal income taxes.
President Joe Biden boasts about the recent rise in the stock market. He’s right that stock prices have continued to decline over the past 14 months. The S&P 500 index exceeded 5,000 for the first time in history. This is an increase from 500 cases about 30 years ago.
For all its problems, the United States is a unique alpha male nation. The dollar is the only currency of global importance (the euro and BRICS are weaker sisters), and for the first time the US economy produces far more than all of socialist Europe combined.
The Magnificent Seven technology companies — Amazon, Apple, Google, Nvidia, meta, microsoft And Tesla is approaching a higher value than all the stocks in every other country except China combined.
Only 16% of Americans say Biden has helped the middle class.
But it’s not just Biden’s stock market bullish talk that’s being policed. Most of the market’s gains just made up for the dismal returns of Mr. Biden’s disastrous first two years in office, when stocks fell by almost 15%. In other words, for the most part, the past 14 months have only made up for the ground he lost in the 2022 stock market crash.
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Yes, it is true that stock prices are at record highs in nominal terms. But one of his first rules of investing is that you need to be careful with your investments. rear– Gains from inflation. If you invest in a widget company and ten years later its stock doubles in value, and all other dollar price levels double, sorry, but what can you buy with that profit? It’s not a good idea to judge based on.
So, let’s take a look at what happened to stock prices during the first three years of President Biden’s inauguration, that is, until the end of January 2024.
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During this period, price levels increased by approximately 18%. Therefore, the S&P 500’s real (inflation-adjusted) return after three years of the Biden administration will be just 8%. That’s pretty poor, and well below the average annual real return since the New York Stock Exchange opened, which averaged more than 20% over three years.
Dutch Masters, CEO of Carnivore Trading, said investors should use the “Craman Countdown” to determine the extent of the market.
Biden’s performance is also far worse than the bull market below. donald trump. At the time President Trump took office, the S&P was up 36% in real terms, or more than quadrupled.
President Trump has argued that the stock market’s rise in recent months is a result of his increased chances of being elected president in November. I don’t give much weight to that claim. If the stock market crashes, will he be responsible too?
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But an analysis by ace investor Scott Bessent and Prosperity Liberation Committee member Scott Bessent shows that stock market fluctuations over the past year are positively correlated with betting market odds that Trump will win. It turned out that they were in a relationship.
Currently, his approval rating is just over 50%. This relationship may be spurious, and of course, the biggest factor in valuing a stock is earnings.
Sam Stovall, chief investment strategist at CFRA, said the market doesn’t need to drastically revise its assessment of the tech industry when it comes to “making money.”
Final investment advice: Investors should pay attention to the agenda if Democrats win in November. biden economic plan It calls for doubling capital gains taxes, taxing unrealized capital gains, and increasing both corporate and dividend taxes.
This is certainly very bad news for stocks. You can also take it to the bank.
For more information about Stephen Moore, click here
Stephen Moore is a senior fellow at the Heritage Foundation and co-founder of the Unleash Prosperity Committee. His latest book is “Gobzilla: How the government’s relentless growth is eating away at our economy. ”
