The Tax ‘Panacea’: It’ll Boost Your S&P Target, But Will It ‘Make You Taller’?

Who wants to talk about whether the GOP tax plan is priced into U.S. equity markets?

Something tells us if we posed that question to a crowd of investors we’d end up with a room full of full pockets – i.e. no raised hands. (aside: that’s an allusion to a quote from one of the best cult movies of all time)

This debate is beyond ad nauseam. Bringing this up again risks skipping straight past the nausea and getting immediately to the vomiting.

But alas, this is going to be a conversation everyone insists on having despite the necessity of keeping a receptacle on hand to retch into.

The latest analysis comes from Wells Fargo, who begins with the following sarcastic assessment:

It looks like President Trump will be able to sign into law the Tax Reform Bill by Christmas. Many see this action as a panacea that will spur economic growth, earnings growth and make you taller as well as providing a host of other benefits. Thanks to this holiday gift, we’ve spent the closing days of the season trying to objectively determine the key investor takeaways.

Yes, the GOP has pitched this giveaway to corporations and wealthy Americans as a panacea that can even “make you taller” – now if only it could increase hand size (ahem) and cure bone spurs Trump could stop being so insecure and would also be fit for combat.

The upshot from the Wells note is that the bank is upping their 2018 S&P500 Price Target to 2863 from 2784. Here’s the math on that:

Here are some possibly useful bullet points from the note: