Expect a stampede of companies handing out bonuses, raising pay, spending on capital projects and giving to charities, with the windfall from the newly passed corporate tax cuts.
AT&T, Comcast and other companies said they would use tax reform to give money to their employees and increase capital spending.
Wells Fargo and Fifth Third said they would raise their minimum wage.
Analysts expect other banks to follow, as well as other companies that will get a boost from the tax law changes.
"This is exciting stuff. This is good. This is not just a whole bunch of guys saying I can buy back a lot of stock here and jazz up my numbers through financial engineering. This is a bunch of business leaders saying we can use this tax benefit to grow our company, keep our loyal employees and assist the community," said Dick Bove, banking analyst at Vertical Group.
The corporate tax rate is being cut to 21 percent from 35 percent. Bove said banks pay an average 31 percent tax rate.
Bove said he now expects the other banks to follow with similar announcements.
"It looks like they are going to use that money to stimulate more employee loyalty by increasing spending. They are also going to get more liberal with their stock programs. They are going to increase philanthropic activity because it's one of the ways they stimulate business," he said. "I was convinced they were going to cut prices and go to war with each other, which I'm sure they will still do."
Boeing also announced $300 million in employee-related spending and charitable donations. FedEx, when it announced earnings, said it expects U.S. GDP could increase materially next year as a result of tax reform. It said it would likely then increase its capital expenditures and hire to accommodate the additional volumes triggered by higher growth.
"You'll see more companies doing this," said Quincy Krosby, chief market strategist at Prudential Financial. "It's excellent PR after all the mantra across the aisle that it's just a tax plan for the rich and for corporate America and for people who own stocks.
The industries that see the biggest advantage in the tax law are expected to spread some of the proceeds around. Industrial companies are among the winners, as are media and retailers.
Tech is the sector that will gain the least from tax reform, since the average tax rate is about 24 percent.
"It would be smart for utilities to say they're going to cut their rates because regulators will probably force them to do it anyway," said Jack Ablin, CIO of BMO Private Bank.
https://www.cnbc.com/2017/12/20/this-is-just-the-start-of-companies-increasing-spending.html
you mean like the ones that said Hillary in a landslide.