Trump and Caterpillar having a huge rally and that's the subject of the riff. Suddenly, stock markets are mounting a huge spiking rally and I have to believe it has something to do with Donald Trump’s providential escape from an assassin’s bullet. Today, the Dow is up over 700 points, yesterday over 200 points. I don’t think this is a coincidence.
Stock markets are frequently forecasters of the outlook for the health, wealth and welfare of the American economy. Indeed, one could add, the health of the country itself and let’s not forget, Mr. Trump’s policy platform is the growthiest anyone has seen in 44 years since Ronald Reagan, but there’s no Trump growthinest without Trump himself.
When the former president appeared on the floor of the Republican National Convention last night, he looked healthy, in fine form, sporting a small bandage around his right ear. The convention went wild. It was his first appearance since he was saved by the grace of God on Saturday.
US RETAIL SALES UNCHANGED IN JUNE, BEATING FORECASTS FOR SLIGHT DROP
Countless millions watched this event, including investors. What’s so interesting about the stock market rally is it’s being led by old-fashioned industrial companies, like Caterpillar, and also by higher-risk entrepreneurial smaller companies that populate the Russell 2000 index, which is also booming.
Think about CAT, for a moment, the quintessential American manufacturing company. Think farm tools and equipment. Think cheaper fertilizer and crops. Think middle America. Think working folks wearing heavy gloves, hard hats, and, of course, the very famous CAT hats. People working with their hands. People benefitting from lower taxes and getting rid of thousands and thousands of pages of onerous, burdensome red-tape paperwork.
Think of farmers who don’t know a thing or couldn’t care less about something called DEI — diversity, equity and inclusion. CAT, farmers, manufacturing — is a wake up at dawn and work your tail off all day meritocracy. Think about smaller businesses, now booming on the hopes of tax cuts and deregulation.
By the way, making the Trump tax cuts permanent not only means lower business tax rates, it also means those farmers and other working folks can write off that CAT equipment immediately. It’s called expensing in Year 1. It saves a bloody fortune in tax payments, both now and ten years in the future.
Think about Mr. Trump’s new vice-presidential running mate, JD Vance, who rose up from virtually nothing, graduated from Ohio State, excelled at Yale Law School, served his nation in the Marine Corps, wrote a brilliant book, and among other things has been a successful venture capitalist. Hold on a second, to that phrase "venture capitalist" — the second word is "capitalist." As in, free market, free enterprise meritocracy.
Think about Donald Trump, and all that his Biden Democratic opponents have been slinging at him for years — the phony Russia hoax, the phony lawfare, and how he has stood up to the test, time and again. Think strength. Think tough.
I want to put those words together. Trump, capitalist, free enterprise, tough. If you think hard enough, it’s not too hard to think why the American stock market is suddenly exploding and absolutely loves the Trump tale, perhaps the greatest political comeback in American history. That’s my riff.
This article is adapted from Larry Kudlow’s opening commentary on the July 16, 2024, edition of "Kudlow."
