Tax Reform Bonuses To Lift Retail Stocks

The retail industry is about to get a big boost from Republican tax cuts, setting the sector up “exceptionally well” in the new year, according to one of Wall Street’s biggest banks. Barclays raised its rating on Target and Lowe’s stocks on Friday, citing numerous benefits for the retail sector as a result of the tax overhaul. “A potentially overlooked story that’s developing could be the amount of stimulus about to be released upon consumers by all U.S. corporate actions regarding employee pay/bonuses from the tax reform,” analyst Matthew McClintock wrote in a note to clients. The analyst compared the current GOP measure to one passed under President George W. Bush in 2001, when sales growth at retailers surged in the months following tax relief thanks to an influx of cash into the economy. “We believe that these ‘windfalls,’ whether through unexpected pay raises or one-time bonuses will flow largely through discretionary spend, particularly big ticket items,” he said. Read more at CNBC.