SENDING THE BILL TO THE KIDS’ TABLE
IN THIS ISSUE…
Will corporate earnings continue to rise in 2018?
What are the pros and cons of the recently approved federal budget?
What are the investment implications?
“No one voting for this bill can claim to care about debt and deficits – in fact, it is fiscal malpractice. Congress just ordered everything on menu and then some and sent the bill over to the kids’ table.”
– Committee for a Responsible Federal Budget (CRFB), a non-partisan, non-profit organization in a recent press release
Consistent with past actions, Congress has once again taken the easy path while leaving others the hard work of addressing our nation’s long-term fiscal problems. The passage of a bipartisan federal budget by the Senate and the House, which followed the massive tax cuts passed in 2017, represents an inflection point for U.S. fiscal policy, and one which has important implications for stock and bond market investors. The current concerns about growing deficits and national debt levels are pushing interest rates higher, yet only somewhat higher than the recent historic lows. At the same time, markets are experiencing greater volatility after an extended period of extremely low volatility. Due to the increase in the federal budget deficit, we are modestly adjusting our expectations for interest rates, inflation rates and market volatility, but we are not changing our positive views on corporate earnings and the companies benefitting from this environment. We remain focused on the secular beneficiaries we have defined previously and would remind our readers that the drivers for these businesses remain firmly in place, notwithstanding these changed fiscal and monetary conditions. Moving forward, investors should expect even greater capital flows to the beneficiaries of this Outlook, particularly leading defense, technology and healthcare companies as well as those benefitting from increases in consumer spending globally. One important consequence of the changes in our Outlook is that we anticipate that there may be fewer winning companies in 2018.
Nicolle Scavuzzo has joined Chestnut Park Real Estate as Chief Operating Officer. Her career has included senior roles in brand marketing, customer experience and loyalty, CRM technology and training at Four Seasons Hotels & Resorts, American Express, and...
Peerage Realty has completed the placement of a three-year C$175-million revolving credit facility to fund future acquisitions and growth in the North American real estate sector. The revolving credit facilities also provide access to additional financing of...
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