US: S&P 500 ROE rebounding but policy help required to climb much higher – Goldman Sachs
|Analysts at Goldman Sachs explain that late-cycle margin risks and the uncertain path of oil suggest that significant further growth in S&P 500 ROE will depend on policy reform.
Key Quotes
“Investors have begun to appreciate that the boost to S&P 500 earnings from corporate tax reform will likely be delayed until at least 2018. Regulatory reform that does not require legislation faces fewer obstacles. Reduced leverage has weighed on Banks ROE but deregulation could lead to $200 bn of excess capital deployment and a 350 bp boost to 2018 ROE. While Financials ROE declined in 4Q to 9.3%, the lowest level since 4Q 2012, aggregate S&P 500 ROE rose slightly to 14.4% due to the rebound in Energy margins.”
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.