"Many of the headwinds that sparked the U.S. stock market's biggest swoon since 2011 are no longer weighing down the market like they did earlier this year, says Don Luskin, chief investment officer at TrendMacro.

"The big August correction was caused by the strong dollar, collapsing oil prices, a scary slowdown in China, and a Fed that seemed determined to hike rates despite it all," says Luskin. "Every risk factor driving the big correction has reversed for the better now."

"The current very strong relative attractiveness of stocks versus bonds puts a safety net under how far equities can fall," says Donald Luskin, chief investment officer at TrendMacro. "There's a natural hedge here. More panic in China should drive long-term bond yields lower as a safe-haven play, and that would make stocks look even more attractive on a relative basis."

I said people were going to anticipate the end of the Obama era. I didn't say it was going to happen in the first week of the year. This was obviously the roughest week in equity markets. But Donald Luskin noted in our paper that the 70% decline of oil prices over the last year represents $2.9 trillion of savings to consumers world-wide. This is enormous. You couple this with people seeing the end of the Obama era, and eventually we're going to get more discussion about tax reform in the Republican primary. I think that optimism starts coming back.

Financial analyst and our contributor Donald Luskin has described Donald Trump as a "black swan" over the political economy. He's referring to an outlier event that few anticipated and whose impact is impossible to predict. As the voting season begins in Iowa, this strikes us as a useful way for Republicans to think about the Trump candidacy.