There's a blue collar boom out there – that's what investors are telling us and that's the subject of the riff.
The Trump trade on Wall Street is predicting a blue-collar boom for the economy. Since election night, the Dow Jones is up over 2,000 points – including over 500 points earlier today. In fact, the 1,500-point Dow rise on the day after the election was the single largest daily gain in history.
The rally is not just about NVIDIA and the Big Tech stocks. It spread to banks, industrials like Caterpillar, and small caps in the Russell 2000 – and let's not forget that the Trump trade includes the spectacular rally in Bitcoin, which has gone up 43% – or $30,000 – since the election fifteen days ago.
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Mr. Trump has styled himself a cryptocurrency aficionado. As reported by Charlie Gasparino and others, he's even talking about a ‘Crypto czar’ in the White House and widespread use of cryptocurrency – that would provide competition for the excess money created by the Federal Reserve.
It's very much like Nobelist Friedrich Hayek's idea of competing currencies. The Fed hates this. So, it must be a good thing. The Trump trade is also a good bet that he will keep his promises to produce vastly more energy, especially liquid gold, Trump tax cuts 2.0, massive deregulation, budget cuts from Elon and Vivek, and a sound King Dollar.
Yes, he will protect American business from unfair trading practices using tariffs as a crucial negotiating tool. It could very well be a new golden era for the economy and the nation as a whole.
Hopefully, the tax cut package will be the very first order of business on the legislative calendar.
In order to cement his expanding coalition of working folks of all races and ethnicities, Mr. Trump must quickly restore take-home pay. Real median wages adjusted for inflation fell during the Biden years and, along with spiking prices, that sunk Kamala Harris in the election.
Hopefully, lower energy prices will keep inflation low while tax and regulatory reductions will boost business, jobs, profits and blue-collar pay. Putting tax cuts first is going to be very important and then, side by side with tax cuts, comes the regulatory revolution led by Elon Musk and Vivek Ramaswamy.
Using recent Supreme Court decisions – and working with the White House Office of Management and Budget – the DOGE commission will chop down federal regulations, chop down the size of the federal bureaucracy, chop down the bloated federal budget, and chop down a lot of money that's been authorized but never spent.
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You only need 51 votes in the Senate to rescind certain types of spending and any number of regulations, as Senator Rand Paul told us about on the show last night.
The Trump trade and the blue-collar boom. I'd call all that: pure gold. That's the riff.
This article is adapted from Larry Kudlow’s opening commentary on the Nov. 21, 2024, edition of "Kudlow."
