Economist optimistic about future market growth
Nationally known economist Robert Genetski is optimistic about continued growth in the economy and even expressed a positive prediction about Chicago's football team.
"It's been a great year for the stock market, and it may be a great year for the Chicago Bears," said Genetski, known for using humor and anecdotes to make complex economic principles understandable.
The Saugatuck, Michigan-based expert, known for his conservative views, addressed the polarization of the country, tariffs and Amazon's minimum wage increase at the 15th Annual Economic Breakfast hosted by Cornerstone National Bank & Trust Co. at the Cotillion Banquet Facility in Palatine Thursday. About 250 business leaders attended.
Genetski was not so positive in his outlook for the state of Illinois. He talked about the heavy tax burden on residents due to unfunded liabilities for pensions and health benefits for state workers.
"It's a serious situation for Illinois," he said, adding that people are leaving the state for financial reasons. Private industry in Illinois is decreasing and housing prices have not kept up with national levels, he said.
"Illinois really hasn't done much to correct its particular problems with respect to finances," he said.
Genetski stressed that the overall economy is good and that the stock market should continue to prosper. He addressed the importance of the new trade deal that President Donald Trump struck between the U.S., Canada and Mexico to replace the nearly 25-year-old NAFTA. It's known as the United States-Mexico-Canada Agreement, or USMCA. The three countries reached a consensus after more than a year of talks. It involves major changes on cars and new policies on labor and environmental standards, intellectual property protections, and some digital trade provisions.
Genetski does not believe we will see a downturn in the stock market, as some experts are saying, mainly because of strong corporate earnings growth that we're experiencing largely because of corporate tax cuts and a booming economy.
"Long-term stock market performance depends upon the long-term earnings of corporations," he said.
He said one problem that many companies are facing is the labor shortage. He said when companies, like Amazon, increase minimum wage, it hurts small businesses by taking skilled workers away. "I'm very much against minimum wages. I'm in favor of having the market drive wages up as high as they possibly can go," he said.
Looking at the economy as a whole in the last year, Genetski concluded it has been positive.
"I think we're going to have another good year in the year ahead."
Genetski suggested more caution going forward, stressing the need to watch whether corporate earnings start to slow down. He said the stock market is also more at risk when it is close to fundamental value.
"Stay on board. Enjoy the ride for as long as it lasts," he said.
Attendees said they enjoyed the forecast. "He is always good," said Bill Buchta of Lake Barrington.
"It's always enlightening," said Dennis Krzneminski, owner of Northwest Oilers in Palatine. As a small-business owner, he said he agrees with Genetski on minimum wage.