During the fourth quarter of 2017, US equity markets largely continued their move higher. During the quarter, the US Congress successfully passed fiscal stimulus via tax reform. The tax reform package encourages cash repatriation back to the United States, reduces the tax burden for corporations, and potentially encourages much needed capital investment into the US economy. Equally important to corporate tax reform is the continued effort by the administration to provide regulatory relief for various businesses and industries. We believe the combined effect of these fiscal initiatives should help to offset liquidity pressures that may result from the Federal Reserve beginning to reduce its balance sheet.
Unlike monetary stimulus that can have a very broad and potentially temporary impact to capital markets, the positive effects of corporate tax reform and regulatory relief should be more targeted as the impacts are idiosyncratic at the company level. As we continue to transition from monetary to fiscal stimulus and the global capital markets adjust to the shifting liquidity environment, we would anticipate volatility for the broad market with increased deviation between individual stocks. Our outlook remains balanced, stock-specific, and not reflective of opportunities in specific industries, regions of the world, or broader market indices._____________________________
Information contained herein was obtained from recognized statistical services and other sources believed to be reliable and we therefore cannot make any representation as to its completeness or accuracy. Any statements not of a factual nature constitute opinions which are subject to change without notice.
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