American multinational finance and banking company JPMorgan have said that the stock market will see a five percent surge if Donald Trump’s tax reform goes ahead.
Shawn Quigg, the company’s derivatives strategist, has commented that investors should start buying call options in those companies that are most likely to benefit from the much talked about reform.
JPMorgan Chase stated that they think the tax reform, should it be set into law, could mean a five percent boost to the S&P 500. But, they also think that high-tas stocks could see an even higher rise in value should a newer, more tax-friendly way of doing things come about.
JPMorgan believes that investors should put themselves in a position for a rally in the market, believing that the fretting over President Trump’s odds of getting his tax reform through is being overstated.
The Wall Street giant believes that the most important catalyst for near-term upside equities is yet to come with the passage of the US Tax Bill. They say that the significant analysis they have done into the market has shown that a great many people are underestimating President Trump’s ability to push through reform.
Call options they have suggested investors should buy include those in Concho Resources, Southwest Airlines, Hilton Worldwide and E-Trade. A call option is simply a contract that states you will buy shares at some point in the future at a price that is set in stone, which means that it is usually a cogent bet.
The company’s research team is one of the best, so it would pay for any investor to listen to what they say. It’s easy to see stock ratings free and for educated people to check out the facts and figures for themselves, but people who don’t listen to the overweight ratings JPMorgan has given to the likes of ConocoPhillips, Hilton Worldwide and Marathon Petroleum shares, they could miss out on some serious gains.
They should also take the time to consider the benefits of the companies that have been given neutral ratings by JPMorgan, which are CF Industries and Regions Financial, which are likely to be safe bets too.
US Tax Reform Bill
The US Tax Reform Bill proposal was approved on November 16 by the Senate Finance Committee, with a close vote of 12 to 12. However, the proposals that were approved by this committee differ in many ways from the bill that was passed by the house. This means that the bill will need to go through a round of amendments before it can be passed into law. Once passed, both chambers will need to iron out their differences and take a final vote to pass the bill in the same form before President trump can officially sign it into law. If JPMorgan are right, we can expect this to happen sometime soon, and since they probably have the best analysts out there, it seems that it’s highly likely the two houses will come to an agreement that lets the bill through.