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IGNORE THE SCORE: A big hurdle for Republican repeal and replace efforts was the outcome of their CBO scores leading to headlines declaring millions more people will go uninsured from their bills - an easy tagline for the opposition to mobilize support against. However, the CBO released their score of the bipartisan stabilization effort by Senators Lamar Alexander (R-TN) and Patty Murray (D-WA) and it’s creating good press - reduces deficit by $4 Billion over 10 years, no additional patients uninsured, and lowers premiums in the exchanges. It seems that with 24 co-sponsors and a CBO score like that the bill would face smooth sailing, but the president’s back and forth alongside conservative efforts to stick in a temporary repeal of Obamacare's individual and employer mandates have stopped the motion in its tracks.

SALT IN THE WOUND: Republican Representatives from high-tax states have been giving House leadership fits all week. The House agreed to vote on the Senate’s bill with minor tweaks in order to speed up tax reform, getting even the conservative Freedom Caucus and Republican Study Committee on board. Now, these New York, New Jersey, and California Representatives are threatening to vote against the budget bill (later today) unless assured tax reform will not include eliminating the State and Local tax (SALT) deduction. House Ways and Means Chair Kevin Brady (R-TX) is not worried about the budget vote - saying he is confident he will strike a deal with the interested parties on SALT before that time.

THREE TAKEAWAYS ON EARNINGS SEASON: The S&P 500 has realized five consecutive quarters of year-over-year earnings growth. Based on the third quarter earnings data so far, it looks as though this trend still has room to run. So far, 139 of 498 S&P 500 companies have reported year-over-year sales and earnings growth of 4.8% and 7.1% respectively. Digging still deeper into earnings, reveals that 11 of 68 Technology companies have reported 41% year-over-year earnings growth. How did we get here? Three important takeaways: 1) Companies have been handily beating earnings estimates. 2) Companies have not been “manufacturing” earnings beats by lowering guidance. 3) Companies have been revising up their earnings guidance. CLICK HERE to watch a six-minute video in which Macro analyst Ben Ryan digs into earnings season and explains why you shouldn’t “get off this train for earnings growth accelerating” just yet.

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MISC.: The House Ways and Means Subcommittee on Trade is working on a new Miscellaneous Tariff Bill (MTB). The MTB is used to benefit U.S. manufacturers by suspending tariffs on input goods they use in production. An MTB has not been signed since the last one expired in 2012. Pro-business groups like the U.S. Chamber of Commerce have begun lobbying for this year’s MTB - as necessary for preserving American jobs. The U.S. Trade Commission also published a report recommending thousands of tariff suspensions be included. Trade has been a source of tension for Republicans since President Trump took office - while he cannot vote on or write the legislation, it's hard to see how an MTB will pass at the same time the Administration is working to make trade “fair” by reducing quotas or increasing tariffs on all goods even those used in U.S. manufacturing.

WHO PAYS FOR HURRICANES?: When Trump signs this next hurricane relief package into law - Congress will be tasked with finding a way to cover the money and prevent adding to the deficit. These relief packages are just the beginning of what are sure to be ongoing requests for funding, which is why Senator Rand Paul (R-KY) didn't vote for the recovery bill - “You'll find often that it's easy to be compassionate with someone else's money. But it’s not only that... It’s compassion with money that doesn't even exist.” In the past, Congress has gotten clever with tax breaks, back taxes, expensing and business loans - things they will certainly have to balance amidst tax reform when they are already struggling to offset lost revenue.

ANNOUNCING OUR NEW LEGAL CATALYSTS VERTICAL WITH PAUL GLENCHUR: We are pleased to announce the launch of our new Legal Catalysts vertical, highlighting key cases and legal developments with significant potential impact across multiple sectors.  Paul Glenchur, our longtime telecom and media analyst, but also a former federal appellate court law clerk, attorney, and member of the Supreme Court Bar, will lead this research offering. Check it out here.

FCC RELAXATION OF MEDIA OWNERSHIP LIMITS (SBGI, TRCO, NXST, TGNA, FOXA): Our Senior Telecom Analyst Paul Glenchur writes that as expected, the Republican-controlled FCC is easing media ownership limits, updating its rules for the digital age. Read the full piece here.

FERC COMMENT PERIOD ENDS ON DOE PROPOSAL TO AID COAL & NUCLEAR: Our Senior Energy Analyst Joe McMonigle writes that we believe FERC is open to the DOE proposal, but is likely to extend consideration by months. Similar FERC action would be closer to March 2018. Read the full piece here.

EPA REVERSES COURSE ON RFS & RINS POLICY AFTER IOWA HOSTAGE TAKING: Our Senior Energy Analyst Joe McMonigle writes that Iowa Senators blocked an EPA nominee and Trump caved on biofuels policy, but an EPA letter providing assurances also raises litigation risk. Read the full piece here.

SENATE BUDGET RESOLUTION DOES NOT RESOLVE DEFENSE BUDGET: Our Senior Defense Analyst Emo Gardner writes that the Senate Budget Resolution does not remove defense spending caps. Read the full piece here.

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