STREET DOGS: Trump’s tax plan
The Trump trade is back on everyone’s agenda
Adapted from #SaxoStrats: Trump’s tax plan is finally here and though it’s short on details some key points are clear. The corporate tax rate is set at 20%, down from the current 35% … and a reduced 35% top income tax rate for individuals. These measures [should] be a major boost for the economy and US equities. Judging by market reaction to the plan it’s clear that a potential alpha portfolio … should be US small cap stocks, financials, consumer discretionary and energy. The latter sector has also been driven by higher oil prices — the market is pricing in a positive outlook for oil on a Trump tax reform. What could go wrong? Republicans are already expressing concern over the fiscal budget from these extensive tax cuts. It’s likely that Trump’s starting position on taxes will be far from the final result … his deal-making record will also create uncertainty over the tax bill. While many things can go wrong we believe investors should grab the opportunity to be overweight US as lon...
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