The corporate tax holiday proposed by President Trump is likely to help with the valuation problem as well. Under President Bush in 2004 a similar tax holiday was enacted. While the expected benefits were job creation, the real benefits were to shareholders as companies paid out dividends or bought back stock. Fewer shares of stock equates to a higher earnings per share figure.
- Employment: Growth in the employment sector remained steady in January. According to the Bureau of Labor Statistics, there were 227,000 new jobs added in January, up from a revised December total of 157,000 and well above the 2016 average of 187,000.
- Interest Rates: Continued strength in the labor market and consumer spending, which has sent inflation closer to the Fed target rate of 2.0%, will likely substantiate further rate increases in 2017 and 2018.
- GDP: According to the "second" estimate of the GDP from the Bureau of Economic Analysis, fourth-quarter 2016 gross domestic product grew at an annualized rate of 1.9% (the same rate as the first estimate). The growth rate for the third-quarter GDP was 3.5%.
- Inflation: Consumer spending increased in January as inflation continues to trend upward. The Producer Price Index, which measures the change in the prices companies receive for goods and services, increased 1.6% over the last year. The Consumer Price Index, which measures what consumers pay for both goods and services, increased 2.5% over the last year — the largest 12-month increase in nearly five years.
- Housing: The median sales price for existing homes in January was $228,900--7.1% higher than the median sales price for January 2016.
- International markets: Earnings reports from European companies have been positive for the most part, adding to the optimistic economic outlook in Europe.