Remember the Tax Cuts and Jobs Act of 2017? Small- and mid-sized corporations should have used the extra money on capital expenditures and debt repayment. Instead, most chose to spend on stock share buybacks.

Profitability hopes soared in 2017. And through the magic of earnings per share (EPS) perceptions, profits appeared to be growing in 2018.

By 2019, however, EPS had stagnated. The only thing that was actually rising? A giant stock bubble.

Today, COVID-19 and an oil price war appear to have popped the stock bubble. In particular, the iShares Russell 2000 ETF (IWM) has already fallen below its November 2016 price.

November 2016 should sound familiar. That’s when the promise of Trump’s tax cut stimulus accommodated a victory in the presidential election.



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