The CEO of Gabelli Asset Management
says strong corporate profits, tax reform, and new infrastructure and defense spending will buoy markets
Not exact matches
Underlying market conditions, such as rising earnings estimates,
strong corporate balance sheets and record
profit margins, remain favorable, he
said.
The wage pop [last Friday's 2.9 % growth in hourly wages] spooked the markets because investors, already skittish as valuations were a bit steep (though not as bad as people have been
saying, given
strong current and expected
corporate earnings), envisioned this sequence: wage growth gooses price growth (i.e., inflation), which raises both market and Federal Reserve interest rates, which slows growth and shaves
corporate profit margins.
Quarterly U.S. earnings have been
strong, but investors
said worries are increasing that
corporate profits are at a peak, with estimated year - over-year
profit growth for S&P 500 companies above 25 percent, according to Thomson Reuters data.
Thanks to a
strong increase in
corporate profits last year, the report
says, survey respondents were more confident that their companies will make more money available for philanthropies.