It is tempting to attribute the 20% surge in the S&P 500 since the US elections last November to the prospect of tax reform. But while this may have played a role, it does not appear to have been the main factor. So if, as seems possible, Congress fails to agree on tax reform any time soon, we doubt that the index will plummet. Indeed, we continue to forecast only a small pull-back by end-2017, to 2,500.
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