Gross Domestic Product
There will be 189 companies in the S&P 500 that will report earnings this week. On Friday, the 3rd quarter GDP report will be coming out. This number could be lower than last quarter as we wait to see what impact the hurricanes had on it. Tax Reform continues to be a hot topic in Washington. Last week, a big step was made in that the Senate passed the budget resolution allowing for 1.5 trillion dollars in net tax cuts.
Expectations are around 3.9% growth for this quarter. This number is down from the start of the quarter in which expectations were around 5%. While this sounds bad, this could be looked at as a good thing because there is a much lower bar for companies to jump over. When stocks and markets move up companies typically beat expectations. Regarding tax reform, the fact that the Senate passed it on Thursday and now the House reviews it this week, we could actually see details on a tax bill by week end, which is a lot quicker than people expected.
State Tax Regulation
To remind you, a few weeks ago we highlighted the state of North Carolina and how well they’ve done because of low regulation and low tax. Another state that is similar is the state of Texas. From 2007 to 2013, Texas created more jobs than all of the other 49 states combined. This was accomplished by implementing low taxes and a low regulated environment.
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