Tax reform - More octane for Wall Street
For equity markets in particular, Ed Campbell, a managing director with QMA’s Dynamic Asset Allocation Team, says the tax cuts will further fuel the rally in S&P 500 stocks. Financials, telecoms and small caps are poised to be the biggest beneficiaries, along with other domestically oriented segments that currently have high effective tax rates.
Even before the bill, corporate earnings were forecast to grow 11 percent in 2018, and the tax cuts could likely deliver an additional 5 to 6 percent.