Ever wonder what would happen if you poured gasoline on a raging fire? Well we may see the market equivalent if Trump’s massive tax reform goes through in the coming months. As the President seeks to give corporations a massive tax cut, the rising markets may just take off to another level.
CNBC recently spoke to portfolio manager Michael Allison from Eaton Vance who is very optimistic:
A corporate tax cut could beef up earnings among companies that currently face a relatively high rate, he said.
Allison also went so far as to say that the proposed tax cut could boost the market as much as 10%! This massive increase in the market’s value could be the first major spur of positive volatility in a while, something that the market has been starved of.
But Allison is not the only one feeling bullish about tax reform. Investor’s Business Daily also recently put out an article on the potential explosion in Apple’s value if tax reform were to go through on its proposed levels:
RBC estimates that the plan, which includes a corporate tax rate cut to 20% from 35% and a lower repatriation tax on foreign profits, could provide Apple with a “tailwind” to earnings per share of $4 to $4.50 in its fiscal 2018, which started Oct. 1.
RBC says that this would push Apple value over one trillion dollars. In a market that has been increasingly driven by the FANG and GAMA stocks, this projection means that the market could well and truly break through to another level.
Investors should look at this time as a potential opportunity: While tax reform has not been cemented as of yet, once it is, experts such as these believe that prices will skyrocket. Take time to decide if this is a good chance for you to get into the market as this could mark the beginning of a major upturn.
To read CNBC’s article on Michael Allison’s projection of tax reform’s impact on the market, click here.
To read Investor’s Business Daily’s article on Apple potential one trillion dollar value, click here.
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