- October showed another month of gains for the major equity indices. The Dow Jones Industrial Average rose 4.3%, the Nasdaq Composite gained 3.6% and the S&P 500 added 2.2% during the month.
- Corporate reports for the third quarter are showing better than expected revenue and earnings growth with some effect from the hurricanes. With 80+% of the companies in the S&P 500 having reported, revenues have grown 5.8% and earnings per share (EPS) have increased 5.9%. Excluding results from the insurance industry, which were impacted by the hurricanes, EPS growth jumps up to 8.5%.
- House Republicans released their tax plan and, assuming it passes, the bill moves on to the Senate for the next step in the legislative process. There are a myriad of details in the 429-page document, but, in general, corporations would benefit more from tax relief than individuals. Since the bill will be considered under the reconciliation process in the Senate, it cannot increase the deficit after 10 years. As currently constructed, the legislation does not appear to meet that criterion. However, it is the very beginning of the process and we still expect some tax reform to occur in 2018.
* This commentary reflects the opinions of Welch & Forbes based on information that we believe to be reliable. It is intended for informational purposes only, and not to suggest any specific performance or results, nor should it be considered investment, financial, tax or other professional advice. It is not an offer or solicitation.
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