I want to open tonight with multiple topics. First up, there is a nice-looking stock market rally with the Dow rising 1,350 some odd points over the past couple of days, kind of out of the blue after the dismal third quarter.
Year to date we are still in bear market territory with the S&P 500 down 21%. Now, permit me to ruminate on this. First, I always like it when America's portfolio goes up.
The latest Gallup survey shows 58% are invested in stocks in one way or another, through their 401(k), pension funds and whatnot. That could come to nearly 150 million people. That's a big number.
Joe Biden doesn't pay any attention to the stock market. He and his wokesters think it's all rigged by a bunch of rich people, but they are wrong. They don’t believe in free markets, let alone stock markets.
Middle American working folks are in the market and they've had a rough time of it, but I'm glad there are some happy moments, at least for a couple of days.
However, not to be a killjoy, but a stagflationary economy with a lot more Fed tightening ahead of us and lower corporate profit markdowns (remember, profits are the mother's milk of stocks) makes me think this relief rally based on short covering will not change the overall bearish trend.
Some people are saying the weak JOLTS report, with 1.1 million fewer job openings, following yesterday's weak ISM manufacturing report, suggests less Fed tightening and lower interest rates. In other words, bad news is good news. I never liked that logic.
Personally, I always think good news is good news. Good news is strong growth, price stability, a sound king dollar and more people working and prospering. Good news is never recession.
So, I don't like perverse logic, just saying, but you can safely long-term bet on America and its capitalist prosperity.
This little progressive, socialist interlude is going to be cleaned out before too long. That's why I always agree with professors Burton Malkiel of Princeton and Jeremy Siegel of Penn — that stocks for the long run is always the best investment strategy. Kevin Hassett and Nancy Tengler will come on the show later to tell us more about the stock market story.
The second thought tonight, and I just can't help myself on this: The Biden administration is now using Ronald Reagan's "evil empire" line to justify their continued nuclear deal negotiations with the outlaw state of Iran. That sound you hear is my blood boiling. This is a pathetic Biden argument.
First of all, Reagan's basic take on the Soviet Union was very simple: We win, they lose. I haven't heard Biden say that about Iran. Also, Biden's never had the gumption to call Iran the "evil empire." He hates MAGA more than he hates Iran.
Another point: Reagan in his first term wouldn't even meet with Soviet leaders. Not only would he not negotiate with the communists, he wouldn't talk to them. Period.
Instead, he spent his first term bolstering America's defenses, investing trillions of dollars into our national security, including the anti-ballistic missile system sometimes called "Star Wars" that is now the center of American defenses against nukes.
The other part of Reagan's first term was tax cuts and deregulation to rejuvenate American economic growth, which then provided the resources to support our national defense.
When Reagan got around to meeting Gorbachev in his second term, he told the Soviet leader that Star Wars was non-negotiable, pointed out that the American economy was producing the goods to support our defense and that the collapsing Soviet economy couldn't support anything. So, in a couple of years, we won and they lost.
Biden has turned a boom into a bust. His State Department keeps begging the Iranians for a deal — a deal, by the way, that is non-verifiable and would include a couple hundred billion dollars of assistance to a bunch of people who are known internationally to lie, cheat, steal, terrorize and kill anything and anybody supporting America.
In fact, not to put too fine of a point on it, it's almost Biden saying: "We lose, they win." I just need to get that off my chest.
This article is adapted from Larry Kudlow's opening commentary on the October 4, 2022, edition of "Kudlow."