Of S&P 500 companies reporting earnings so far, tax reform is the most talked about policy change, according to FactSet analysis published Friday.
Forty-two firms have posted quarterly results as of Wednesday, and FactSet said 11 discussed tax policy in their conference calls. Six of those 11 said lower taxes would would benefit their customers, clients or themselves, the analysis said.
Goldman Sachs was among them:
"... to the extent to which tax rates come down, we're a beneficiary. But obviously, changes in tax policy can be a huge catalyst for how all of our clients think about deploying their capital, strategic decisions."
President Donald Trump has proposed cutting the corporate tax rate from 35 percent to 15 percent. While the final figure is likely to be somewhere in between, analysts expect reductions in the tax rate to boost companies' revenues, and consequently their earnings.
Not all the discussion around tax reform has been positive, however. Retailers and oil refiners have spoken against a proposed "border adjustment" tax plan that would increase their costs, since those industries bring product from overseas to sell into the United States. The border adjustment idea would tax imports but leave exports untaxed.
General Electric, which was not included in the FactSet study, said in its conference call Friday that "border adjustability" would not affect what the company pays in taxes overseas.
GE also said that most of the tax policy discussion so far "is all speculation" and "what GE wants, and what we think is most important (for) competitiveness for U.S. companies, is essentially a competitive tax rate."
U.S. stocks have rallied to record highs since the November election, with most analysts attributing the gains to bets on Trump's promised tax cuts, infrastructure spending and deregulation. Others say the economic environment is favorable for companies to grow, regardless of what may be a disappointing political regime.
"The policy part of it may take longer to figure out than markets anticipate," said Paul Christopher, head global market strategist at Wells Fargo Investment Institute. "If they start talking about tax reform next week, I think that will be a very positive thing."
"Really the major policy initiatives that will matter for earnings will develop over time and probably won't be implemented until 2018," Christopher said, noting that a better economy overall should support earnings growth regardless of government policy.
S&P 500 earnings per share are expected to post a second straight quarter of growth, after four quarters of earnings decline, according to CFRA Research.