OPTIMISM ON THE U.S. ECONOMY

Our president has kept his hands off the economy so far, and the outlook continues to be very good.  Even the public is progressively getting optimistic.  We already are in the 3rd longest economic recovery ever at 100 months (begun June 2009) and bearing down on the 2nd longest.

The third-quarter CNBC All-America Economic Survey found 43 percent of the public believes the economy is excellent or good, a record high in the 10-year history of the survey. Thirty-six percent believes the economy will get better, down a couple of points from last quarter, but just 23 percent say it will get worse, down 6 points.*

Let's hope the president manages to mess up his tax plan. like he did with repealing and replacing Obamacare.  I do think it might be worth it to lower the maximum corporate tax rate some, possibly to 25% or maybe the 22% suggested by some; however, going to 15% is ridiculous.

To keep track, the 2nd longest economic expansion was for 106 months from February 1961 to December 1969 (Kennedy-Johnson).**  The longest was 120 months from March 1991 to March 2001 (Bush-42 - Clinton).  Assuming the president and congress don't mess it up, the present recovery should become the 2nd longest about next April.

Added later: The Manufacturer's Index is the best since 2004 and the Seivices Index the best since 2005.***  But (quote in italics)
Regardless, what's clear is stocks are very overbought. How overbought? The relative strength indicator (RSI), a widely watched momentum indicator of stock movements in the last several weeks, has the Russell 2000, industrials, financials and energy sectors all with an RSI over 90. That is WAY overbought. Readings below 40 are considered oversold, anything over 70 is overbought, and over 90? ***

* https://www.cnbc.com/2017/10/03/american-optimism-about-the-economy-fails-to-lift-trumps-approval-ratings.html
** https://en.wikipedia.org/wiki/List_of_economic_expansions_in_the_United_States
*** https://www.cnbc.com/2017/10/05/tax-cuts-fueling-the-market-melt-up-but-signs-show-stocks-are-way-overbought.html