Finance: JPMORGAN: There's still a fortune to be made in the stock market by betting on tax reform

Banks across Wall Street are bullish on stocks heading into 2018, with many citing the positive effect of tax measures proposed by the GOP.
JPMorgan is one of those firms, and it thinks investors are asleep at the switch, ignoring crucial upside in equities in the event that Republicans pass corporate tax cuts. The bank estimates that the S&P 500 has the potential to climb 5% from current levels.
"The most significant near-term upside catalyst for equities is still ahead — passage of the US tax bill," Shawn Quigg, an equity derivatives strategist at JPMorgan, wrote in a client note. "Our analysis indicates the market is significantly underestimating the probability of tax reform passage."
But since so much uncertainty is still lingering around the tax plan, Quigg says traders have to pick their spots carefully. This means eschewing broader stock index bets and focusing on single stocks closely linked to tax-reform progress.
The table below shows JPMorgan's highest-conviction single-stock tax bets. To identify them, the firm screened its proprietary index of tax-linked companies, zeroing in on those with robust options trading volume and low implied volatility.
JPMorgan recommends these single stocks as a way to bet on the successful passage of the Republican tax plan.

The Senate's version of the bill cleared the Senate Finance Committee before Congress' Thanksgiving recess and is expected to be rolled out Tuesday for debate and amendments on the Senate floor. A vote is expected by the end of the week.
As Business Insider's Bob Bryan points out, the plan could run into some trouble. Sen. Ron Johnson of Wisconsin, one of two public Republican "no" votes on the Senate tax bill, told reporters Monday that he planned to vote against the plan as written in the Senate Budget Committee.
Still, if you remain optimistic, JPMorgan's suggested strategy is one to consider. After all, with so much uncertainty surrounding tax reform, those willing to risk positioning for upside could wind up reaping huge profits.
SOURCE - PULSE.NG posted by Campus94