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Opinion
Stephen Gandel

Trump Tax Trade Goes Cold

Companies at both ends of the cost spectrum swap sentiment.
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Photographer: Justin Merriman/Getty Images

President Donald Trump says cutting corporate taxes is his No. 1 priority after repealing Obamacare. And House Republicans laid out on Thursday what they would like to see done with the tax code. Investors, though, appear to have lost faith in their ability to follow through.

The shares of the 100 S&P 500 companies that paid the highest effective tax rates last year, and therefore have the most to gain from a tax cut, have recently been lagging behind the rest of the index. Even more telling: At the same time, the 100 S&P 500 stocks with the lowest tax rates, those that stand to benefit the least from a tax break, have been outperforming the market.