Morgan Stanley says tax reform bill and performance outlook will boost US large cap stocks

According to Golden Finance, Morgan Stanley strategists say that large cap stocks in the United States are attractive because they are expected to benefit from the fiscal spending bill and strong performance prospects. The team led by Michael Wilson suggests that the tax reform bill may have the potential to improve cash flow, thereby supporting investment logic in sectors such as technology, communication services, healthcare, and energy. In addition, the significant improvement in the breadth of performance expectation revisions - the number of analysts who raised their profit expectations minus those who lowered their expectations - has boosted investor sentiment in the context of ongoing trade uncertainty, "Wilson pointed out. He reiterated his preference for the financial and industrial sectors and pointed out that there has been a significant increase in profit expectations for these sectors in the near future. The new tax reform bill is beneficial for large cap stock indices, as is the strong earnings per share correction, "Wilson wrote in the report.