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The Four Key Themes From Q4 Conference Calls

Saturday, February 18, 2017 8:36
% of readers think this story is Fact. Add your two cents. / by Tyler Durden / Feb 17, 2017 5:38 PM

In its quarterly Beige Book publication, Goldman conveniently gathers anecdotal evidence of fundamental and thematic trends from the earnings transcripts of companies in the S&P 500. As Goldman’s Davis Kostin explains, since President Trump’s surprise victory over Hillary Clinton in November, investors and management teams have been acutely focused on the new administration’s policy proposals. In this Beige Book, we focus on management commentary regarding four key pillars of the Trump Administration’s agenda: tax reform, regulation, fiscal spending, and trade policy.

Here are the summary highlights:

  • Tax reform: Managements are optimistic about potential n corporate tax reform, but are concerned about the controversial border-adjusted tax. Lower corporate taxes represents a potential tailwind to corporate earnings, but our US Economics team expects comprehensive tax reform may be delayed until late 2017 or early 2018. Selected examples: BBT, BXP, CAT, CB, CVX, JNJ, PFE, PNC, UPS, and UTX.
  • Regulation: Hopes for widespread deregulation and improved regulatory clarity are increasing confidence among some management teams. Selected examples: BBT, BXP, CMCSA, COP, CVX, MA, MO, PAYX, PX, and T.
  • Fiscal spending: Managers of industrial firms are enthusiastic about potential infrastructure spending and a possible end to the defense sequester. President Trump proposed a $1 trillion infrastructure plan in his presidential campaign, but we expect the actual spending package will be $25 billion per year. Selected examples: AEP, AET, DGX, FDX, JNJ, LMT, LUV, and PX.
  • Trade policy: Management views are mixed on whether President Trump’s trade proposals will be constructive or will lead to damaging retaliation from US trade partners. Selected examples: CB, HON, MS, NKE, and PYPL.


The post The Four Key Themes From Q4 Conference Calls appeared first on Silver For The People.


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