That Wall Street may end on gains for the second day in far too long, thanks to a spate of healthy earnings reports and the fruits of McDonald's latest master stroke, is good for the market as well as my conscience. Watching the Dow fall about ten percent over two months finally settled like a thorn in my mind: last night I dreamt that I turned to a television screen when Fox News' Shepard Smith announced "a little bit of profit taking" and saw that the Dow Jones had dropped in an afternoon to 900 points. Tomorrow, those few traders who remain alive are sure to take advantage of some of the best deals since 1884!
Wall Street is fickle and too often superficial; but one is led to suspect that a certain party's possession of the White House leads to a general consensus that the economy is never as good as it should be. News audiences hear this; they complain to pollsters who return dismal confidence numbers to reporters and the wheel spins faster. And when corporate earnings are released, how many are willing to blame a bad quarter on mismanagement rather than Washington? Fundamentals seem stable. Industrial production's up, jobless claims are down even further than the record lows through which they've recently dropped. As reports are presented, there's more give than take. Certainly, spending could be lower — but the opposition party has less hay to make of Federal Reserve Chairman Alan Greenspan's warning than they may think. If Democrats can obstruct a gamut of Capitol business, they can prevent bloated federal budgets.
Where's the market? Where it should be and, as Larry Kudlow argues smartly, with the correct policy foundation, with quite a lot of vigor to spare.
TWO-OH-OH-MY: Two hundred six points upward in the Dow. May today set a turnaround — and a trend.
BY THE WAY: One should know enough to read entirely through a mainstream article to find what's been buried. Alan Greenspan announced that "activity appears to be expanding at a reasonably good pace," and that, contrary to the misfiring klaxon known as Paul Krugman, "it certainly doesn't seem that" the specter of the late 1970s, "stagflation," can or will return.