Homepage / Investment / New GOP tax law will boost corporate earnings at least 10%, says Merrill Lynch wealth manager
Quick US green cards are available to Indians — but they're not cheap US Department of Justice says it will pursue investigations related to Malaysia's 1MDB Sony to acquire Mubadala's stake in EMI Music Publishing in $1.9 billion deal Asian stocks set for mixed start after US-China trade talks give global markets a boost Cramer Remix: Joint ventures in China may be a thing of the past Fortnite may draw younger consumers to gaming for the long term, says Take-Two CEO Micron shares spike in after-hours trading after a deal with Intel Trump trade advisor Navarro reportedly floated suspected FBI informant for an administration job The mental strategy Netflix CEO Reed Hastings used to grow a billion-dollar business Trump's China negotiators act like the bumbling bank robbers from 'Dog Day Afternoon' One analyst's impassioned argument against breaking up Google Elon Musk says making a cheaper Model 3 now would cause Tesla to 'die' Shopify slumps after Adobe announces acquisition of e-commerce rival Magento Epic makes ‘Fornite’ biggest esport in the world with $100 million in prize money Siri just told me it's 'getting a lot smarter' soon Larry Page has been completely silent as Alphabet faces one ethical crisis after another General Motors is a 'raging bull' opportunity in autonomous car space: Citigroup GE shares rise to three-month high as Wall Street analysts praise train deal as beginning of turnaround Banks are hiring former spies and adopting military-style tactics to fight cybercrime Carl Icahn says his stake in VMware is 'sizable,' worth 'hundreds of millions' Tesla Model 3 falls short of Consumer Reports recommendation The Obamas just signed a multi-year deal to make shows and movies for Netflix White House economic adviser Larry Kudlow on ZTE: 'They're not going to get off scot-free' Apple, Exxon, Chevron and GE all have this one thing in common MoveOn and other left-leaning groups are petitioning the FTC to break up Facebook State regulators launch 'Operation Crypto-Sweep' to police cryptocurrency investment schemes Goldman: Don't worry about rising interest rates until the 10-year yield hits 4% Comcast's lush new storefronts are reminiscent of Apple Stores Mnuchin: 'I'm very bullish on stocks' and sustained economic growth over 3% British court dismisses charges against Barclays over 2008 Qatar deal JetBlue-backed private-jet company signs up for hybrid electric planes Inside the mysterious death of a 'biohacking' entrepreneur that wanted to upend the pharma business Cramer: I believe former Trump advisor Gary Cohn 'would've liked' this trade framework Critics say big tech is 'mostly useless' —but here's some tech that has changed my life drastically As Google falls under renewed criticism, Treasury Secretary Mnuchin says 'you have to look at the power they have' Hot stock Micron surging again after chipmaker raises its guidance due to ‘healthy’ semiconductor industry Here's why your computer has a mouse, according to Steve Jobs in 1985 These tech stocks — including Skyworks, Qualcomm — have the most to gain on a US-China trade truce US-China trade agreements are ‘face-saving’ and ‘lose-lose,’ says Moody’s chief economist Investors seem to forget that markets can and will go down. It's called risk amnesia Snap shares rise after prominent bearish analyst says the worst may be over Apple shares to struggle over the next 12 months on weak iPhone X demand, Instinet says Zuckerberg's meeting with EU officials will now be livestreamed following criticism As consumer staples get slammed, one name looks primed for a breakout, Piper Jaffray says China reportedly considers scrapping two-child limit per family Tesla shares to soar more than 80% on strong Model 3 profitability: Analyst US likely to slap tough oil sanctions on Venezuela — and that's a 'game changer' for Maduro Stocks making the biggest moves premarket: GOOGL, GE, MBFI, TSLA, FOXA & more Google seems to have removed most mentions of ‘Don’t be evil’ from its code of conduct Deadly virus identified as a potential epidemic kills nine in India This is the impact the Italian populist government could have on the euro As the payment wars heat up, PayPal could have a leg above Square FCC is investigating a website flaw that exposed mobile phone locations Microsoft buys a start-up that wants A.I. to make conversation with humans Malaysia sets up new 1MDB criminal taskforce The EU’s support for the Iran deal is ‘not sufficient,’ Tehran says London is a 'laundromat' for Russia's dirty money, UK report warns Be careful if China cuts you a check, says former US trade official Ryanair CEO says some airlines will not 'survive' the winter due to elevated oil prices China-style state-led growth won't work in Africa, former Nigeria finance minister warns Italy's next prime minister could be a mostly unknown law professor European markets seen higher as trade war concerns ease The Fed is an open book, but foreign trade and security are the wild cards Everything you need to know about a new EU data law called GDPR One in five 'initial coin offerings' may be frauds — but investors are bullish on them anyway China's space ambitions continue with reported launch of satellite to explore far side of the moon US-China trade developments are in focus for Asia markets The 2018 Hyundai Elantra GT Sport is a bargain hatchback that lacks performance How to record the screen on your Mac Tips from pro gamers on mastering Fortnite, the hottest game on the internet South Korea's LG Group chairman dies from illness at 73 South Korea, US to work closely on summit after Pyongyang's about-face EU could compensate firms hit by US sanctions over Iran – French minister Elon Musk teases new specifications for Tesla's embattled Model 3, calling it 'amazing' Virtual reality is finally ready for normal people, and the $200 Facebook Oculus Go is your ticket Social media was supposed to 'bring the world closer together.' Instead it's making us pettier A royal wedding, in pictures: Britain's Prince Harry marries Meghan Markle Tech investors take a Warren Buffett approach to raising money for blood cancer research Germany uses its past to try and police hate speech on Facebook Inside the training camp where Google shares its A.I. secrets with Alphabet-invested companies A longtime Google investor drew a simple chart on a napkin to explain everything in health tech Twitter CEO Jack Dorsey: Here are some surprising facts about the billionaire China lands bomber on South China Sea island for first time Prince Harry, Meghan Markle wed in Windsor as millions watch ISS sides against two Tesla directors, backs split of Musk's roles China says opening up of financial sector will need reciprocity iPhone app makers are forming a 'union' to demand improvements from Apple That Facebook royal wedding quiz? It could put you at risk for identity theft Banks will trade cryptocurrency sooner than people think, says fmr. JPMorgan blockchain executive Square stumbles into the banking business Amazon briefly hit session low after report that Trump pushed the USPS to double shipping rates Former Microsoft executive Qi Lu steps down as Baidu COO Netflix is reportedly turning the Michael Lewis book 'Flash Boys' into a movie Dell remains focused on a VMware merger, and now it's getting feedback from tracking stock holders CBS fight is 'the beginning of the end' of dual-share structures, says former NBCUniversal CEO Emerging markets are trading in correction territory — but some call the stocks a buy Bitcoin rally this week fails to materialize as New York conference brings more hype than substance Boeing’s antics at the World Trade Organisation risk a trade war Commodities are posting their best returns in a decade and Goldman thinks there's more to come US reportedly cancels B-52 bomber exercise with South Korea amid threats from North Korea

Investment

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.