On Monday, I had the pleasure of returning to Reuters TV to have a quick conversation with anchor Fred Katayama (@Freddiethekat). We discusses outlook for the market (bullish!), earnings (pay attention to guidance on inflation and growth) and how the market hasn't baked in the corporate tax cuts.

We also discussed this issue on our quarterly investment outlook for our clients. Here is one of the charts:

S&P 500 earnings

As you can see S&P 500 earnings expectations have been at $145 since the end of September and we all know that tax reform was passed in the last week of December. At this point, analysts haven't even revised earnings estimates higher to account for the boost to net income which gets double impact from the tax cuts and then likely share buybacks. Even at $145, S&P earnings growth would be 15%. We could easily see $155 which would be 25%. This should push stocks higher and could be a repeat of 2017s great returns.


Are you bullish or bearish for 2018?