FedEx and UPS Emerge as Investors Select Winners of Tax Revision –

FedEx and UPS Emerge as Investors Select Winners of Tax Revision



FedEx Corp. and United Parcel Service Inc. increased more in more than a year due to expectations that they will get particularly large profits from the tax. -the package of overhaul that makes its way in Congress.

Bills pbaded by the House of Representatives and the Senate reduced the corporate tax rate to 20 percent, from 35 percent. Shipping companies such as FedEx and UPS, as well as airlines and railroads, are especially well positioned to benefit from a provision that allows them to spend capital equipment immediately, rather than over time.

"I think it's more a trade sector: people looking for higher taxes and high capital investments to turn around," said Paul Lambert of Tocqueville Asset Management, which owns airline shares. "You will be allowed to spend all of your capital expenditure and get the tax relief."

Brian Belski, Chief Investment Strategist at BMO Capital Markets, talks about tax reform and markets.

(Source: Bloomberg)

FedEx jumped 4.7 percent to $ 241.63 at 1:31 p.m. M. in New York after rising as much as 5.3 percent, its highest intraday gain since September 2016. UPS gained up to 4 percent, the most intraday since July 2015, before cutting the gain to trade 3.3 percent higher at $ 124.28. Deutsche Bank updated the stock to buy from the hold.

The Standard and Poor & # 39; s 500 Transportation Index advanced 3.6 percent.

Beyond the tax package, the growing demand for global shipments of air cargo is driving up postal prices, said Kevin Sterling, badyst at Seaport Global Securities. [19659005] "The environment is one of the best environments I've seen in my 15-year career," he said.

The railroads have almost reached the maximum capacity of their equipment, including containers that can travel by road, rail and sea, Sterling said. Railroad Union Pacific Corp. climbed 5.5 percent, leading the S & P Transportation Index

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