Homepage / Investment / New GOP tax law will boost corporate earnings at least 10%, says Merrill Lynch wealth manager
Amazon says this Prime Day was its biggest shopping event ever Kudlow says President Trump is 'so dissatisfied' with China trade talks that he is keeping the pressure on As stocks regain their footing, an ominous warning looms Goldman Sachs downgrades Clorox to sell, says valuation is 'unsustainably high' How Satya Nadella has spurred a tripling of Microsoft's stock price in just over four years Kudlow says economic growth could top 4% for 'a quarter or two,' more tax cuts could be coming The one chart that explains Netflix’s stunning comeback US housing starts plunge 12% in June to a nine-month low Aerospace titans Boeing and Airbus top $110 billion in orders at Farnborough Target uses Prime Day to its advantage, logging its 'biggest online shopping day' so far this year Billionaire Marc Lasry sees bitcoin reaching up to $40,000 as it becomes more mainstream and easier to trade These are the 10 US airports where you're most likely to be hacked Amazon shares slightly higher as investors await Prime Day results Wreck of Russian warship found, believed to hold gold worth $130 billion A bullish ‘phenomenon’ in bond market is weeks away from fading, top credit strategist says Stocks making the biggest moves premarket: MS, GOOGL, TXN, UAL, NFLX & more Twitter shares up 50% since late April means most upside priced in, analyst says in downgrade EU fines Google $5 billion over Android antitrust abuse Mortgage applications fall 2.5% as buyers struggle to find affordable homes America may not have the tools to counter the next financial crisis, warn Bernanke, Geithner and Paulson Investors are getting spooked as the risk of a no-deal Brexit rises EU expected to fine Google $5 billion over Android antitrust abuse Ex-FBI chief James Comey urges Americans to vote for Democrats in midterm elections Elon Musk apologizes to British cave diver following baseless 'pedo guy' claim Disney, Comcast and Fox: All you need to know about one of the biggest media battles ever Xiaomi shares notch new high after Hong Kong, mainland China stock exchanges reach agreement The trade war is complicating China's efforts to fix its economy European markets set for a strong open amid earnings; Google in focus Hedge fund billionaire Einhorn places sixth in major poker tournament The biggest spender of political ads on Facebook? President Trump Asian stocks poised to gain after Fed's Powell gives upbeat comments; dollar firmer Stocks are setting up to break to new highs Not all FAANG stocks are created equal EU ruling may be too little, too late to stop Google's mobile dominance Cramer explains how Netflix's stock managed to taper its drop after disappointing on earnings Airbnb condemns New York City's 'bellhop politics,' threatens legal retaliation Amazon sellers say they were unfairly suspended right before Prime Day, and now have two bad choices Investor explains why 'duller' tech stocks can have better returns than 'high-flying' tech names Elon Musk is 'thin-skinned and short-tempered,' says tech VC Texas Instruments CEO Brian Crutcher resigns for violating code of conduct Google Cloud Platform fixes issues that took down Spotify, Snapchat and other popular sites Uber exec: We want to become the 'one stop' transportation app 'What a dumb hearing,' says Democrat as Congress grills tech companies on conservative bias Amazon shares rebound, report says Prime Day sales jumped 89 percent in first 12 hours of the event How to put your medical history on your iPhone in less than 5 minutes Investment chief: Watch these two big events in 2018 Even with Netflix slowing, the market rally is likely not over Cramer: Netflix subscriber weakness debunks the 'sky's the limit' theory on the stock Netflix is looking at watch time as a new area of growth, but the competition is stiff Why Nobel laureate Richard Thaler follows Warren Buffett's advice to avoid bitcoin Rolls-Royce is developing tiny 'cockroach' robots to crawl in and fix airplane engines After Netflix plunge, Wall Street analysts forecast just tame returns ahead for the once high-flying FANG group Roku shares rise after analyst raises streaming video company's price target due to customer growth China is investing 9 times more into Europe than into North America, report reveals Amazon says US Prime Day sales 'so far bigger than ever' as glitch is resolved Netflix is on pace for its worst day in two years US lumber producers see huge opportunity, rush to expand San Francisco to consider tax on companies to help homeless Homebuilder sentiment, still high, stalls as tariffs, labor and land drive up costs Powell backs more rate hikes as economy growing 'considerably stronger' Netflix history is filled with big stock declines – like today – followed by bigger rebounds Intel shares get downgraded by Evercore ISI due to rising competition from Nvidia, AMD Petco aims to reinvent the pet store with something you can't buy online Genetic testing is coming of age, but for consumers it's buyer beware Tech 'FAANG' was the most-crowded trade in the world heading into the Netflix implosion, survey shows Netflix weak subscriber growth may indicate a 'maturity wall' that could whack the stock even more: Analyst This chart may be predicting the bull market's demise Wall Street says Netflix's stock plunge is a ‘compelling’ buying opportunity because the streaming giant ‘never misses twice’ Tesla sinks after Musk tweets, again Boeing announces new division devoted to flying taxis Stocks making the biggest move premarket: NFLX, UNH, GS, AMZN, WMT & more Deutsche Bank downgrades Netflix, but says big subscriber miss is not 'thesis changing' IBM is experimenting with a cryptocurrency that’s pegged to the US dollar North Korea and Zimbabwe: A friendship explained Virgin Galactic spinoff Orbit to launch rockets from the UK with space deal Artificial intelligence will create more jobs than it destroys? That’s what PwC says ‘Treasonous’ Trump and ‘Putin’s poodle:' Scathing headlines follow the Trump-Putin summit China’s fintech companies offer ‘enormous’ opportunity, investment manager says Trump's performance at summit with Putin was 'unprecedented,' experts say Walmart and Microsoft link up on cloud technology as they both battle Amazon European stocks seen mixed amid earnings; Fed’s Powell to address Congress How I knew I should quit my day job and run my start-up full-time: Viral website founder China's stocks have been trounced, but the trade war may ultimately be good news for those shares Billionaire tech investor Peter Thiel bets on crypto start-up Block.one Asian shares subdued open after mixed close on Wall Street; energy stocks under pressure Amazon cloud hits snags after Amazon Prime Day downtime Netflix isn't doomed by one quarter unless people start questioning the long-term investor thesis Tech stocks set to sink on Tuesday after rough evening for ‘FANG’ Netflix plummets after missing big on subscriber growth This wristband lets humans control machines with their minds The U.S. has a rocky history convincing Russia to extradite computer criminals Amazon suffers glitches at the start of Prime Day Jeff Bezos is now the richest man in modern history 'The United States has been foolish': Read Trump and Putin's full exchange Goldman Sachs recommends these 5 highly profitable companies — including Nvidia — to combat rising inflation Goldman Sachs releases 'tactical' stock picks for this earnings season Three red flags for Netflix ahead of its earnings report The bond market may be raising recession fears, but don't expect one anytime soon Cramer: Banks are 'making fortunes' but are still as hated as they were during the financial crisis Putin told Trump at summit: Russia never meddled in US election


New GOP tax law will boost corporate earnings at least 10%, says Merrill Lynch wealth manager

U.S. companies stand to reap a “huge benefit” from the new Republican tax law, which includes a dramatic corporate rate cut, said the head of portfolio strategy at Merrill Lynch Wealth Management.

“We’re anticipating at least earnings going up an additional 10 percent than where we were without the tax plan,” Mary Ann Bartels told CNBC’s “Squawk Box” on Friday. “We were already seeing analysts raising their numbers. And now with the tax plan, we expect the numbers to go up even more.”

As part of the tax law, the federal corporate tax rate was cut from 35 percent to 21 percent.

Expectations for strong earnings have helped propel the stock market to one of its best yearly starts in years, Bartels said.

Credit Suisse’s chief U.S. equity strategist, Jonathan Golub, agrees with Bartels about the tax benefit to earnings and the market.

“About 25 companies have provided guidance on what’s going to happen to their tax rate,” Golub said in a later CNBC interview on Friday. Their earnings-per-share estimates for 2018 are “up 9 percent from the day before the tax change up until today,” he said.

“For those companies who provided no guidance at all, they’re up only 1 percent on their EPS” 2018 estimates, he said. “The EPS estimates are way too low; probably 7 or 8 percent more upside to 2018 EPS as that guidance trickles out.”

However, Tracie McMillion, head of global asset allocation strategy at the Wells Fargo Investment Institute, does not think the tax boost to the market will last.

The market rally in the first few weeks of 2018 has been a “rapid repricing” due to tax reform, said McMillion, who appeared with Golub on “Squawk on the Street.” “We don’t expect that rate of return to last through the rest of this year. We see some leveling off.”

The Dow Jones industrial average hit its 10th all-time intraday high of 2018 on Thursday, but ended up closing nearly 100 points lower.

The Dow has gained more than 5 percent so far this year, on top of a 25 percent advance for all of 2017. Since Donald Trump won the presidency in November 2016, the Dow has rocketed nearly 42 percent higher as of Thursday’s close.

Bartels also credits a stronger U.S. economy and recoveries in emerging markets, Japan and Europe. “We’re kind of what I call in the sweet spot of this part of the growth in the economy and in the world.”

However, earlier this week, billionaire investor Sam Zell and sovereign wealth fund advisor Komal Sri-Kumar told CNBC that they believe the stock market rally is showing signs of “irrational exuberance.” They were evoking then-Federal Reserve Chairman Alan Greenspan‘s famous December 1996 “irrational exuberance” speech that had asked tough questions about the strong market environment at the time. About three years later, the dot-com bubble burst in 2000.

But Bartels told CNBC on Friday that she does not see any “irrational exuberance” in the market.

Bartels also sees the stronger economic backdrop and the new tax law leading to more acquisitions.

“We think you’re going to get the return of M&A too,” she said, predicting mergers on a smaller scale, not necessarily the big headline-grabbing deals.

As for her favorite sector right now, Bartels said, “The true leadership in this market is technology.”

Source: Investment Cnbc
New GOP tax law will boost corporate earnings at least 10%, says Merrill Lynch wealth manager

Comments are closed.