With 2017 coming to its close, we continue to find conflicting opinions on the state of the economy and the outlook for the stock market. On November 14th, Bank of America shared the results of a survey that it says demonstrates investors are “increasingly showing signs of ‘irrational exuberance’, putting more chips on the table even as they worry equities have become overvalued.” Bank of America’s chief investment strategist was quoted as saying, “Icarus is flying ever close to … View More
If 2003 is any guide, we don’t believe investors should overthink the short-term impact of tax cut in 2018. The 10-year rose from 3.1% to 4.6% in six weeks after the 2003 tax cut was passed, GDP surged in 2004, and those companies with vast amounts of cash overseas outperformed. From a longer term point of view, the efficacy of the tax cut will rest with one question – will companies actually use their cash to invest in capital projects? If so, productivity should rise, real GDP will grow, a… View More
Today, the Senate Budget Committee voted to pass the tax reform bill, and it will now make its way to the senate. In the background, Trump is working to get tax reform through. He's turned from against the Alexander - Murray bill to supportive of it. He's also agreed to the risk pool legislation sponsored by Susan Collins. To be blunt, it appears he's working overtime to gather the necessary votes to get tax reform through the Senate. However, tax reform still has a number of significant hurdle… View More
Some will dismiss the growth as "the rich getting richer," but the facts say otherwise. Usual weekly earnings for full-time workers at the bottom 10% are up 4.6% versus a year ago; earnings for those at the bottom 25% are up 5.3% from a year ago. By contrast, usual weekly earnings for the median worker are up 3.9% while earnings for those at the top 25% and top 10% are up less than 2%. Yes, that's right, incomes are growing faster at the bottom of the income spectrum than at the top. A higher e… View More
Markets were mixed Last week, with small and mid-cap stocks gaining while large cap stocks were mostly unchanged. Tax reform once again dominated headlines: the House passed its version of the legislation, while the Senate bill advanced out of the Finance Committee on a party line vote; the Senate may schedule a vote in two weeks. Retailers outperformed; Wal-Mart’s digital and e-commerce initiatives helped produce a +2.7% increase in same-store-sales, the company’s best quarterly performance… View More