Brendan Smialowski | AFP | Getty Images
Secretary of the Treasury Steven Mnuchin (L), National Economic Council Director Gary Cohn (C) and US Secretary of Commerce Wilbur Ross wait for President Donald Trump to speak about newly passed tax reform legislation during an event at the White House December 20, 2017 in Washington, DC.
In an usual move for the executive branch, the White House’s top economic advisor, Gary Cohn, said he believes stocks are cheap.
“I think the stock market — and some other pretty famous investors over the last 24, 48 hours have agreed with us — that the stock market is not expensive right now,” Cohn said Friday on Bloomberg TV.
The director of the White House Economic Council was likely referring to renowned investor David Tepper’s comments to CNBC on Thursday where the hedge fund manager said the market is “almost as cheap as coming into last year.”
Tepper added that both earnings projections as well as economic outlook are improved given recent Republican success in passing tax legislation. The GOP plan cuts the corporate tax rate to 21 percent.
As President Donald Trump’s chief economic advisor, Cohn echoed Tepper’s argument, saying that the tax stimulus will rev market growth in the coming year, spelling upside for investors.
“The stock market is the reflection of what is going on in the global economies, what companies are doing from an earnings perspective,” said Cohn. “I’m not sure people really understand the effect of tax reform in the stock market and we have yet to see the capital expenditure that’s going to come through for five years of expensing.”
Cohn’s boss has not been shy about touting the gains in the market over his tenure, but this is the first time Cohn, the former No. 2 at Goldman Sachs, has been so blunt about the stock market’s actual valuation.