Shouldn’t Factor Tax Cuts in Forecasts, Says Sonders

The video discusses the potential impact of tax reform on corporate earnings and GDP, highlighting the challenges analysts face in forecasting due to insufficient details. It also examines the economic effects of hurricanes, noting the typical pattern of initial weakness followed by recovery, as seen in past events like Sandy and Katrina. The discussion emphasizes the complexity of predicting economic outcomes in the face of natural disasters and policy changes.

What is the expected impact on S&P earnings if corporate tax rates are reduced to 20%?

• A 7% increase in earnings

• A 15% increase in earnings

• No change in earnings

• A decrease in earnings

Why have analysts not included potential tax reforms in their forecasts?

• The reforms are already included in current forecasts

• There is a lack of detailed information

• They believe the reforms will not be implemented

• They expect the reforms to have no impact

What is the likelihood of tax reforms being retroactive to 2017?

• Certain

• Slim to none

• Moderate

• Very high

How do natural disasters typically affect unemployment claims?

• They cause a long-term increase

• They have no effect

• They cause a quick surge followed by a reversal

• They cause a permanent decrease

What pattern is observed in the economy after a hurricane hits?

• Immediate and sustained economic growth

• A pattern of weakness followed by recovery

• No noticeable change

• Permanent economic decline