/biz/ - Business & Finance

Here's your worst case scenario bro.

Doesn't even begin to take into account the more nuanced savings from the 2017 tax bill nor the potential for tariffs largely being under 25%. You can think of the timeline starting in November 2016 upon Trump's election. At that point, the market began pricing in expected corporate tax savings. In November of 2017, the actual plan was revealed to grant a direct 21.5% benefit to corporate profits (along with additional savings), which the market reacted positively to. Too positively, however, as the S&P quickly corrected from 2870 to 2530, which fits perfectly, as 2530 is just about a 20-25% change from pre-2016 election numbers, thus the market just about perfectly captured the tax savings.

The market continued its regular uptrend in 2018 until tariff rhetoric ramped up. At worst, tariffs would result in a 25% drawdown from either the ATH of 2900 or the properly price 2500, which is a range of 2200 to 1900.

Do what this as you will.