Wishing you and your families a very Happy Holiday. We also want to take a moment to thank you for your business and support in 2017. We’ll be back online the week of January 2.
CLIFFMAS IS HERE: As predicted, Congress passed a measure to avoid a government shutdown at the 11th hour, unfolding as it has many times before in our Nation’s Capitol. The House and Senate moved a clean government extension Thursday evening including government spending for both domestic and defense programs, three months of CHIP funding, waivers for the paygo provision, and a FISA extension. What they did not come to terms with are looming sequestration caps, DACA, health insurance markets, defense spending, or disaster aid - as the House passed an $81 billion dollar relief measure without any action taking place on the other side of the dome. The extension runs through January 19th, leaving them a pileup of controversial agenda items to address when we’re back at it again in mid-January.
We put together a list of our tax reform sector series over the past month highlighting our work with Hedgeye’s sector heads covering the impacts of tax reform. Catch our timely and in-depth conversations below:
MACRO TAX REFORM: Our Hedgeye Policy team joined our Macro team to kick off our tax reform sector series. With both the House and Senate proposing to enact sweeping changes to the tax code, there are undoubtedly winners and losers across the various sectors of the economy. We covered the key provisions and assumptions with respect to their likely impact on the domestic economy – from consumer spending, to the budget deficit, to productivity and growth – and ultimately how said reforms might influence the dollar and interest rates. Topics included mortgage interest deduction, SALT deductions, and repatriation. WATCH THE REPLAY HERE.
RUINED PUNCH BOWL? ACA REPEAL MAKES INEVITABLE APPEARANCE IN TAX REFORM: Our Health Policy Analyst Emily Evans hosted a call with Hedgeye’s Health team on the impacts of tax reform to the Affordable Care Act and vice versa. They discussed the implications of tax reform on the U.S. Medical Economy, especially the sub-sectors of services, pharma and med-tech, including: repeal of individual mandate, changes to tax treatment of clinical trials, new tax treatment of research-related income for non-profits, and repatriation of foreign income and shift to territorial tax system. WATCH THE REPLAY HERE.
SIZZLE, OR FIZZLE? FINANCIALS TAKEAWAYS FROM THE HOUSE AND SENATE TAX PLANS: We teamed up with Hedgeye’s Financial and Housing teams featuring Josh Steiner and John Casteleyn on the largest effects of tax reform to their industries. Key takeaways: the impact of SALT taxes on the wealthiest zip codes, risks to the MID deduction, and the House proposal to phase out the exclusion based on the homeowner’s AGI. WATCH THE REPLAY HERE.
TAX REFORM FOR INDUSTRIALS & MATERIALS SECTOR (CAT, DE, TSLA, UAL, TXT, ETC): Jay Van Sciver was itching to team up with us to discuss the impacts to electric vehicle credits, but we also covered other major impacts to industrials including: activity pulled into 2017, the timing of those activities and the impact on certain equipment categories. WATCH THE REPLAY HERE or KEY TAKEAWAYS HERE.
TAX REFORM & RETAIL: We teamed up on a call hosted by Hedgeye's retail team featuring Jeremy McLean and Daniel Biolsi to review the state of the tax bill and our expectation of the impact on the retail ecosystem. Key topics: Corporate rate, foreign earnings, and consumer confidence and discretionary spending. WATCH THE REPLAY HERE.
BRINGING HOME THE BACON: REPATRIATION DEEP-DIVE: We teamed up with Hedgeye’s Macro team to take a deeper dive into the key takeaways that investors need to internalize on the topics of repatriation and corporate inversions. In both our Q4 themes presentation and our Macro team’s call on tax reform in November we outlined some key precedents and return of capital scenarios around Indefinitely Reinvested Foreign Earnings returning home. WATCH THE REPLAY HERE.
CALL REPLAY: TECH & TAXES | WINNERS & (SORT OF) LOSERS: Lastly, we teamed up with Hedgeye’s Ami Joseph for the latest implications of the tax reform proposal on the tech sector. We covered the four types of companies who will experience positive impacts and the three that will experience negative ones. WATCH THE REPLAY HERE.
WAIVING GOODBYE: INCREASED LIKELIHOOD TRUMP WILL NOT WAIVE U.S. OIL SANCTIONS ON IRAN ON JAN 12: Our Senior Energy Analyst Joe McMonigle writes there is early 2018 oil volatility ahead as the window is closing in on a Congressional/Diplomatic fix for the Iran deal, the catalyst for U.S. Sanctions on Iranian Crude. Read the full piece here.
