by Michael Keane
This is Part 3 of the "Tax Bill Analysis" series. It will focus on the support it will create for corporations earnings levels and the stock market as a whole. Please read parts 1 (link here) and 2 (link here) if you haven't already.
The recent tax is about to show its true worth to the economy. That is because it is about to show up on the balance sheets of US corporations. The first earnings cycle is going on in report after report, the one common theme is how much better earnings will be because of this new tax bill. From the banks like JP Morgan or Bank of America, to energy companies like BP or Shell, to tech companies like Apple or Microsoft, this bill is one big windfall. This one of the main reasons why corporations spent millions of dollars lobbying for this bill. It literally means billions of dollars for them and their shareholders. Per disclosure, through retirement funds and partners, some of KeaneVCC's money is invested in shares of these corporations.
This buffer or ignitor for earnings also will have an effect on the market as a whole. PE, or Price to Earnings ratios will drop because of the raised earnings. This puts stock prices at a cheaper level in terms of value. It could either send the market higher, or at the very least buffer any normal drops or corrections seen in the market.
** This blog is used for opinions and ideas and should not be used as a direction to act without doing your due diligence.**
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