Strategas Research Partners Chief Executive Jason Trennert says he believes 2017 will continue to be a banner year for stocks, particularly those tied to the so-called Trump trade.
Trennert said in an interview with Barron's that he sees sectors like energy and financials having underperformed so far in 2017 and expects them to shine in the second half of the year.
"The Trump trade is underpriced," Trennert said in the article. "Expectations are so low that any sense of growing confidence in the White House would be a big positive surprise."
Strategas, which correctly predicted Trump’s 2016 presidential win, was founded in 2006 when Trennert, Nicholas Bohnsack and Don Rissmiller left research firm ISI Group, according to Barron's.
Daniel Clifton, Strategas' head of policy research, said the firm was also optimistic that Congress would pass meaningful tax reform legislation and was expecting Trump to push through $50 billion of fossil-fuel energy project spending that had been halted by the Obama administration.
He believes the administration will be able to pass "pretty meaningful pro-growth tax reform that lowers the effective tax rate by 400 basis points (4 percentage points) and allows foreign profits to be repatriated."
"Repatriation alone would boost earnings per share by $2.58 on the S&P 500 in 2018," Clifton said. "If you have successful tax reform, you’re looking at $7 to $8 of additional (earnings per share) in 2018 that isn’t baked into earnings estimates right now."
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