In mid January, JPMorgan Chase beat Wall Street’s 4th quarter earnings expectations. The bank is the biggest bank by assets and although this year had to do one time charges, next year is expected to save billions of dollars in the tax cut from 35 to 21%. The company as reported by Sweta Singh and David Henry of Reuters hopes more companies will borrow more, do more mergers and acquisitions (M&A) and boost revenues for the bank. The bank expects the tax savings will boost profits for it and then it can increase dividends and stock buybacks.

The company is not expecting to bring back money into the country because it has capital and liquidity requirements. Net revenue rose 4.6% to $25.45 billion which was higher than $25.15 billion. If JPMorgan’s reported under the new tax code, if it has similar results earnings per share (EPS) would have been 17.5% higher.

Linking to dividend paying stocks, the tax cut gave a gift to the largest corporations and while it could be argued that it was foolish, as an investor you need to ensure you are going to take advantage of the gift. There are good ETFs to buy the largest US banks which are low fee and will move up as the banks report higher earnings as they pay less tax.

There are more questions than answers, till the next time – to raising questions.