Bob Doll: Don’t Worry About China; Worry About Corporate Taxes

The most important issue for the next president — and Congress — to tackle is corporate tax reform, stocks will continue to outperform bonds over the next decade, and Brexit is a “nonissue,” Bob Doll told money managers Thursday.

Speaking at the Money Management Institute’s annual convention in Washington, Doll, chief equity strategist and senior portfolio manager for Nuveen Asset Management, pegged corporate tax reform as the “most important issue for the markets” after the presidential election, and laid out some other predictions for attendees.

“My humble prayer before my head hits the pillow is ‘Dear Lord, whether it’s a donkey or elephant or some other animal in the White House, please, please, please have them tackle corporate tax reform,’” Doll said. “If we don’t, it’s not good news for jobs, profits or markets.”

Doll argued that companies will start to flee the U.S. because the nation charges the “highest marginal tax rate in the world, and is the only country that has not permitted its companies to bring cash home without inordinate penalty.”

Added Doll: “If we don’t fix that, dozens of U.S. companies will leave the United States; they don’t need it.”

Doll also noted that because the stock market is driven by earnings — which have been “flat” — the only way stocks are going to be up this year is “we need better earnings.”

Said Doll: “While the bull market in stocks is not over, it is no longer young and vibrant; it is old and wrinkled and needs a cane to walk across the street. But it’s not dead.”

While the “easy money in [the] bull market is in the rear view mirror,” he added, “it doesn’t mean gains are over.”

Beta, he opined, “probably [is] not going to work much; you gotta use some alpha. It’s tough for beta to work now.”