SOURCE: Jerome Levy Forecasting Center

April 27, 2017 13:06 ET

DAVID LEVY SAYS Q1 EARNINGS AND GROWTH LIKELY TO SURPRISE MARKETS ON UPSIDE

Rest of 2017 Depends on Domestic Government Policy and International Developments

MOUNT KISCO, NY--(Marketwired - April 27, 2017) - Economist David Levy, writing in the April issue of The Levy Forecast®, said that "first-quarter company earnings are likely to surprise markets to the upside, with some strength carrying over into the current period."

The chairman of the independent Jerome Levy Forecasting Center LLC (www.levyforecast.com) advised clients to watch for some softening of business activity from April to June, after which "exogenous influences" will dictate the fate of the U.S. expansion, either up or down.

"If the U.S. expansion is either to rev up powerfully or break down, the reason will almost certainly be a major jolt or windfall from the U.S. government or from abroad," he wrote in the nation's oldest publication devoted to economic analysis.

The economists at the Jerome Levy Forecasting Center also warned of an increasingly hawkish Fed, saying that data on "wage and salary inflation and economic performance in the next two or three months might be sufficient to drive bond yields higher and encourage faster Fed tightening."

Persisting questions about U.S. government policy and a range of global issues continue to cloud the outlook. Levy wrote that large tax cuts along the lines of the president's campaign proposal "could shift the U.S. economy into high gear in the second half, making the economy more resistant to higher U.S. interest rates and to international problems."

On the other hand, tax policy disappointments could mean major market shifts. Research director Srinivas Thiruvadanthai wrote in the same issue that, "[Treasury] yields cannot be sustained at current levels without a sizable fiscal stimulus. Treasury yields are likely to move significantly lower if fiscal policy results in only a moderate fiscal stimulus, especially as markets increasingly question the global reflation thesis."

About The Jerome Levy Forecasting Center

The Jerome Levy Forecasting Center LLC - the world leader in applying the macroeconomic profits perspective to economic analysis and forecasting - conducts cutting edge economic research and offers consulting services to its clients. The goal of the Levy Forecasting Center is to improve its clients' business and investment performance by providing them with powerful insights into economic risks and opportunities - insights that are difficult or even impossible to achieve with conventional approaches to macroeconomic analysis. Additional information may be found at www.levyforecast.com.

Note: The full Levy Forecast is available to the press in PDF format by contacting Andrew Edson & Associates - Andrew@edsonpr.com or 516 850 3195.

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