As we have always stated, politics don’t really matter, policy is what matters and that turns our attention back to the federal Reserve and trade issues. The futures this morning are pointing higher. So what gives?
It has always been the case that Wall Street is very comfortable with Washington gridlock meaning nothing changes, which gives Wall Street some degree of certainty. Pundits and investors alike anticipate that the economy will not be getting too much policy support from Washington. This will put less pressure on the Federal Reserve to raise interest rates, making money cheaper for longer, which is good for stocks.
As for the big picture the economy is strong, interest rates are still historically low and we are entering a period of historically good equity performance. The markets always look in advance by about 6-9 months. The S&P is trading at 2755 and Granite believes a little more upside is in store for the rest of this year as well as some decent upside in 2019.
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