Investors are optimistic about the stock market in the wake of good news about economic and corporate-earnings growth in the second half of 2016.

The Wells Fargo/Gallup Investor and Retirement Optimism Index increased in November for the third straight quarter and is at a nine-year high.

Fifty-seven percent, up from 45 percent in the third quarter, are now optimistic about economic growth while only 27 percent are pessimistic.

“Rising investor optimism and the stock market reaching all-time highs is great news to end the year, but it isn’t necessarily driving investors to put their money into the markets,” said Scott Wren, senior global equity strategist for the Wells Fargo Investment Institute. “Investors are more interested in the markets, but it takes time for optimism to translate to flows into the stock market.”

The poll was conducted a week after President-elect Donald Trump’s victory. The S&P 500, reflecting record stock prices of America’s 500 largest companies, is up about 13 percent this year. The index has risen 200 percent-plus since ’09, excluding dividends. Skeptics note that market swoons usually come amid exuberance.

Nearly 60 percent of investors are positive about the economy’s direction; 38 percent are “bracing” themselves for an economic downturn. Most investors identify as Republican. They feel positive. Two thirds of Democratic investors are not. The Wells Fargo/Gallup Investor survey was conducted by telephone with 1,012 U.S. investors Nov. 16-20.

Neal St. Anthony

‘Rumors’ looming over Sherwin-Williams, Valspar deal prompt a second response

Companies are generally loathe to comment on a pending merger, especially deals that require regulatory approval. But Valspar and Sherwin-Williams have twice issued statements to quell “unfounded market rumors.”

On March 20, the companies announced that Sherwin-Williams, the largest paint company in the U.S., would acquire Valspar, the fourth largest, in an $11.3 billion deal. At that time, they said they expected the deal to close by the end of the first quarter of 2017.

Officials knew then they would have to divest some assets of the two companies to gain regulatory approval. The ultimate purchase price is dependent in part on how much the companies will be required to divest. Sherwin-Williams, based in Cleveland, is paying $113 cash for Valspar shares. If Sherwin-Williams is required to divest more than $650 million in net sales, then the deal price would fall to $105 per share.

Companies facing that situation typically don’t disclose information until it’s required. So it’s unusual that on Monday Valspar and Sherwin-Williams issued a joint statement, for the second time, in response to rumors about the deal. On Monday a New York Post story quoted unnamed sources who said the Federal Trade Commission (FTC) has been aggressively vetting the deal and may require more actions before approving it.

The statement said Sherwin-Williams and Valspar are cooperating with the FTC and that they still expected the deal to close in the first quarter of 2017.

Patrick Kennedy

Kashkari duels with Stanford economist

Minneapolis Fed President Neel Kashkari last week jumped into debates about whether the central bank should stick to rules when it sets interest rates or should have greater leeway. He came down on the side of discretion, writing in an Op-Ed in the Wall Street Journal that the job of deciding interest rates can’t be left to a computer. Perhaps that’s not surprising since he’ll have a vote on the interest-rate committee in 2017. But Kashkari also argued that constraining the Fed could lead to economic harm.

His take drew criticism from economists who think interest-rate decisions should be constrained by rules, including Stanford University’s John Taylor, who is the namesake of the so-called “Taylor Rule” that Kashkari specifically targeted in his piece.

In a Journal Op-Ed two days after Kashkari’s, Taylor said he doesn’t think interest rates would be set by computer.

“This is a false characterization of the reforms that I and many others support,” Taylor wrote. “In those reforms the Fed would choose and report on its strategy, which would neither be mechanical nor run by a computer.”

Taylor formed the Taylor Rule in 1993 as an observation about the Fed’s interest-rate setting choices, particularly in the 1980s, saying they seemed to fit a calculation involving the pace of inflation and the difference between targeted and actual GDP growth. He later argued the Fed should follow it as a rule.

That argument has been taken up in recent years by some Republicans, who have portrayed the Fed as “breaking rules” by not raising interest rates to make President Obama look good. The same critics also derided the U.S. economy’s slow growth under Obama, though higher rates would likely have made that worse. It’s unclear where President-elect Donald Trump stands on the role of rules at the Fed. But Taylor is often mentioned as a potential Trump nominee to succeed Fed Chairwoman Janet Yellen when her term ends in 2018.

Evan Ramstad