Background

With the recent volatility in the market the past few months, many investors were left questioning how the future of their portfolios might turn out. Also, with the increasing tensions between the United States and China over the possibility of a trade war, stock prices have jumped back and forth keeping the public nervous. However, at the close of the first quarter, a patch of good news presented itself that was demonstrated in this CNBC article.

The controversial tax plan passed by President Donald Trump seems to be panning out well, at least for the start of 2018. Six of the nation’s biggest Wall Street banks posted savings of a combined 3.59 billion dollars that otherwise would have gone into taxes. Banks have historically had to pay some of the highest taxes compared to other industries in America, which makes the amount saved even more significant. Hopefully more earnings can be added onto the banks revenue once the market uncertainty calms down as well.

Relevance 

Perhaps the most encouraging news stemming from the thriving banks is how the savings trend may carry over to other businesses in the country. As the article states, banks’ tax brackets dropped from around 31 percent to as low as 17 percent in some cases. If a number of Wall Street firms can enjoy the lower cash outflows needed to pay the government, imagine how other companies may also handle the adjustment. If the movement continues, we may see a lot of growth within the coming months from corporations investing more into themselves, and stock prices prospering as a result.