The stock market still isn't accounting for this massive stimulus likely coming from Trump

President Donald Trump boards Air Force One at Andrews Air Force Base in Maryland on March 15, 2017 as he departs for Detroit and Nashville.
Nicholas Kamm | AFP | Getty Images

Jamie Dimon just called it "QE4." And unlike other controversial parts, it's almost guaranteed to be included in the tax reform bill made law by President Donald Trump and the Republican-led Congress.

And yet the stock market isn't expecting it yet.

It's a repatriation tax break, allowing U.S. companies to bring overseas profits back home at a lower rate. They will, in turn, boost their own shares by using the profits returned for buybacks and dividends, and they will help other companies with capital reinvestment and takeovers, strategists said.

"Although tax reform will likely be debated in the second half of 2017 and a wide range of outcomes exists, a deemed repatriation is part of all four major tax options that will
be sent to the President when deciding upon a plan," Daniel Clifton of Strategas Research wrote in a note to clients. Clifton estimates about $2.4 trillion in foreign earnings is stashed overseas.

The policy analyst points out that the firm's repatriation index, made up of companies with the largest foreign cash horde's relative to their market value, is up just 6.4 percent since the election, trailing the overall market.

"Since the election, investors have largely priced in an increase in government spending from defense and infrastructure, but remain lackluster on tax changes," he wrote.

Clifton estimates that $1 trillion could be returned.

That $1 trillion figure is what's got Dimon excited.

"If all companies did [with repatriated funds] was pay dividends and buy back stock, think of that as QE4 ... and far cheaper, in my opinion," the chairman and CEO of JPMorgan said Tuesday.

So how should investors play this next leg of the "Trump bump"?

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