Social Security
There is some great news for Social Security recipients. For the first time in six years Social Security checks will be going up, about 2% or $28-$30 per check. In the past couple years we have had no inflation. In order for Social Security checks to go up you need cost of living adjustments, which is based on inflation. We are starting to see some good inflation numbers in 2017 which is resulting in this increase.
Corporate Earnings
We have really been looking forward to corporate earnings season starting. The first quarter corporate earnings came in at a 15% growth rate which beat expectations and sparked a market rally. The second quarter earnings are projected to grow at 6%. That is a great growth rate considering we had five quarters of negative growth leading into 2017. If we can get corporate earnings growing faster, then we expect that should lead to good market performance going into the second half of the year. Also, if they grow fast enough interest rates could become a moot point.
Taxes
As we stated on the VLOG a few weeks ago, the tax plan has stalled. What we really need to do is “un-stall” it. A tax plan is easier than the Affordable Care Act in that you can break it apart. There are a few things to look at. One is the 15% business tax on owner managed and large business along with immediate expense of a large capital item. The second is the repatriation tax bringing back tax revenues into the United States. If this gets placed at 10%, then it could start to flow back in. The third thing to look at is the possibility of doubling the standard deduction, either single or married. These three things could have a major impact on the economy, specifically regarding growth rate. Our growth rate is currently in the 2.40% to 2.45% range. If we can get this elevated over 3%, a lot of good things can happen, such as deficit decline, tax revenues increase and growing confidence. We are seeing consumers with more money in their pockets, as well as corporations having more money to work towards their earnings. If we start to see taxes come down, that would be a huge positive for portfolios in the market.
Greg Powell, CIMA®
President and CEO
Wealth Consultant
Email Greg Powell here
Bobby Norman, CFP®, AIF®
Senior Vice President
Wealth Consultant
Email Bobby Norman here
Ashley Page, JD, MBA
Senior Vice President
Wealth Consultant
Email Ashley Page here
Trey Booth, CFA®, AIF®
Senior Vice President
Wealth Consultant
Email Trey Booth here
Fi Plan Partners is an independent investment firm in Birmingham, AL, serving clients across the nation through financial planning, wealth management and business consulting. Fi Plan Partners creates strategies in the best interest of their clients using both fee based investing and transactional investing.
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and may not be invested into directly.
Economic forecasts set forth in this presentation may not develop as predicted.
No strategy can ensure success or protect against a loss.
Stock investing involves risk including potential loss of principal.
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