Analysis: US Tax Cut to Deliver Corporate Earnings Gift
A planned massive Republican tax overhaul has led Wall Street strategists to revise their 2018 corporate earnings forecasts sharply higher, but the jury is out on how long the accelerating effect on profits will last. The tax bill, which the U.S. House of Representatives approved on Tuesday, will cut the corporate income tax rate to 21 percent from 35 percent, beginning Jan. 1, and would be the biggest positive factor for U.S. earnings in 2018. A Senate vote was still awaited. Although there is a wide range of profit estimates for 2018, the expected tax plan benefit has strategists now calling for double-digit profit gains in 2018 over 2017, compared with their forecasts for mid-single-digit gains without the tax cuts. S&P 500 earnings growth for 2017 was an estimated 11.9…