EARNINGS WATCH
- 154 companies (35.4% of the S&P 500’s market cap) have reported. Earnings are beating by 5.5%, with 75% of companies surpassing bottom-line estimates. Revenues are surprising by 0.8%.
- Expectations are for revenue, earnings, and EPS growth of 6.8%, 9.9%, and 11.8%, respectively.
- EPS is on pace for 15.4%, assuming a typical beat rate for the remainder of the season.
U.S. New Home Sales & Prices Strengthen
Sales of new single-family homes increased 5.8% (15.6% y/y) during March to 621,000 from 587,000 in February, revised from 592,000. The latest level roughly matched the highest reading in November 2007. Expectations had been for 585,000 sales in the Action Economics Forecast Survey.
The median price of a new home (NSA) rebounded 7.5% (1.2% y/y) to $315,000 following two months of decline. Prices have moved erratically sideways since late-2015. The average price of a new home increased 3.9% (5.6% y/y) to $388,200.
As we saw last week, existing home sales have been strong in the South and weak elsewhere…
Real estate is also a rather local market in Canada:
Source: Moody’s Investors Service, @joshdigga (via The Daily Shot)
Trump’s Tax Plan Would Slash Rate on Foreign Earnings President Donald Trump is planning to unveil a proposal to cut corporate taxes on U.S. companies’ foreign profits and to slash the top tax rate on so-called pass-through businesses, including many owner-operated companies, to 15% from 39.6%.
(…) But parts of his plan clash with House Republicans’ ideas, and the party is embarking on the enormous task of trying to rewrite the tax code with major fault lines on tax rates, tax breaks and budgetary goals. (…)
Lawmakers are likely to struggle to fit the 15% pass-through tax rate inside budgetary and procedural constraints, because it would add more than $1 trillion to the 10-year cost of any tax plan. It also will be hard for Congress to write rules to prevent people from converting higher-taxed wages into lower-taxed business profits. (…)
Most U.S. businesses are pass-throughs, which are called that because their income and deductions pass through to their owners’ individual returns. That group includes many small firms, but it also includes large global law firms, hedge funds and Mr. Trump’s own real estate and branding businesses. These businesses don’t pay the corporate tax rate, which Mr. Trump also wants to lower to 15%. (…)
Mr. Trump’s plan will be silent on the controversial border-adjustment feature in House Republicans’ plan, which taxes imports and exempts exports, and has drawn intense objections from retailers and GOP senators. (…)
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JPMorgan: “Trump’s Tax Plan Will Be Virtually Impossible To Pass Through Congress”
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Competitiveness Impact of Tax Reform for the United States
Trump Administration Mulls More Trade Actions
The Trump administration is considering launching trade actions to protect the U.S. aluminum, semiconductor and shipbuilding industries, while at the same time ramping up free-trade talks with the European Union, Japan and the U.K., Commerce Secretary Wilbur Ross said in an interview Tuesday.
Mr. Ross also left open the possibility that the U.S. government might intervene to help prop up Westinghouse Electric Co., the nuclear-reactor company that filed for bankruptcy protection in the U.S. last month, and may also try to block any new foreign entities from investing in the firm. Westinghouse is a unit of Japan’s Toshiba Corp. (…)
The commerce secretary said the administration is also looking at “potentially reopening South Korea,” a reference to the five-year-old bilateral pact with South Korea. The U.S.’s trade deficit with that Asian ally has increased sharply since the trade deal was implemented. (…)
CAN CHINA SUSTAIN THAT STIMULUS?
Source: BMI Research (via The Daily Shot)