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How will equities react to Trump’s “phenomenal” tax plan?

An overhaul of the US corporate tax code would probably provide a net boost to S&P 500 earnings. Nonetheless, we suspect that it would be small and that it has now been largely discounted in equity prices. For the time being we continue to forecast that the index will end this year a little lower than it is now – our forecast is 2,300 – as margins are squeezed by rising wages and a stronger dollar.

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