Earnings growth may be best since late 2011

Happy birthday, bull run!

Investors are obsessed with politics lately. nevertheless inside the next few weeks, Wall Street is usually likely to focus less on Trump’s America along with more on Corporate America.

The first quarter officially ends on Friday. Big companies will start releasing their latest results along with outlooks inside the middle of April. along with the numbers should be very not bad.

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According to estimates via FactSet, companies inside the S&P 500 are anticipated to report an earnings increase of 9.1% via a year ago.

If of which actually happens, of which would likely be the best quarter of growth in more than all 5 years — the highest since companies posted 11.6% growth inside the fourth quarter of 2011.

John Butters, senior earnings analyst at FactSet, notes of which much of the gain will be due to a huge jump in earnings for energy companies due to substantially higher oil prices than a year ago.

Related: Big Oil could be ready for a big comeback

nevertheless financials along with tech firms are also anticipated to post solid gains in profits.

Assuming of which companies live up to the hype, of which will be interesting to see if President Trump will congratulate himself for the improved upon state of corporate profits. To be fair, he probably does deserve some (albeit not all) of the credit.

Consumer confidence is usually up, which could mean higher sales along with profits for many companies. CEOs along with the heads of modest businesses are more upbeat as well. The jobs market continues to improve as well.

“not bad news feeds on itself. People feel better than they have in years past,” said Kevin Norris president of Univest Wealth Management.

nevertheless the Trump administration isn’t exactly off to a not bad start with its legislative agenda.

Plans to quickly repeal along with replace Obamacare have fizzled. of which’s led to questions about whether Trump will be able to get tax reform, roll back financial regulations, along with also a big infrastructure spending plan through Congress any time soon.

along with of which could mean of which earnings estimates for the remainder of the year could be way too high. Many strategists are predicting double-digit percentage growth in profits for the second half of 2017.

Related: Enough about Trump! Market tired of politics

“The second half numbers are more likely to be reduced as the year progresses,” wrote Lindsey Bell, investment strategist with CFRA Research, in a report This specific week.

Bell thinks earnings growth for all of 2017 could wind up being just 6% — compared to expectations of nearly 12% at the start of the year.

Stephen Wood, chief market strategist with Russell Investments, is usually even less bullish. He thinks 5% growth is usually the best the market could desire because of This specific year. Simply put, he thinks investors got way too excited about how quickly Trump could boost the economy.

“Trump policies will be pro-markets,” Wood said, nevertheless he thinks investors need to be “more subdued.”

“I’m skeptical of there being policy implementation without potholes along with bumps,” he added.

The big wild card is usually tax reform.

If Trump along with Republicans are able to quickly do something of which allows companies to repatriate cash sitting overseas along with bring of which back to the U.S. at a lower rate through a so-called tax holiday, of which could kick earnings into an even higher gear.

The desire is usually of which firms like Apple (AAPL, Tech30), Microsoft (MSFT, Tech30) along with Google owner Alphabet (GOOG) would likely use some of the cash to invest more inside the U.S. — build more plants along with hire more workers.

nevertheless these companies would likely probably also use some of the money to repurchase their own stock — along with boost their earnings per share inside the process.

“Estimates for 2017 may be a little frothy right at This specific point,” said Jeffrey Schulze, a strategist with ClearBridge Investments. “nevertheless of which’s not taking into consideration tax cuts. CEOs are optimistic along with talk about spending more. Guidance could be better than expected.”

sy88pgw (fresh York) First published March 31, 2017: 12:01 AM ET

Earnings growth may be best since late 2011

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