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What you need to know in markets on Friday

Myles Udland
Markets Reporter

At the end of what’s been a sneaky busy week in markets, investors will have a lighter schedule to contend with ahead of what will be a holiday-shortened trading week in the U.S.

The main earnings highlight on Friday will come from footwear retailer Foot Locker (FL), which is set to report results before the market open. The economic calendar will also be fairly sparse, with the monthly reports on housing starts and building permits serving as highlights.

Markets will look to build off what was a positive day on Thursday, with the major U.S. indexes bouncing back after declines earlier this week as the Dow and S&P 500 each gained about 0.8% and the tech-heavy Nasdaq added 1.3%. Walmart (WMT) shares were a big winner on Thursday, rising nearly 11% to a new record high after earnings.

Investors will also be keeping an eye on reports late Thursday that both Comcast (CMCSA) and Yahoo Finance parent company Verizon (VZ) were looking at buying some of 21st Century Fox’s (FOXA) assets, which followed a report last week which said Disney (DIS) and Fox had held talks on the matter.

According to the Wall Street Journal, Comcast and Disney were both looking at most all of Fox’s assets save for its live sports, Fox News, and its broadcast network.

There are now reportedly three major media players — Comcast, Disney, and Verizon — looking to scoop up some 21st Century Fox assets, which could include Fox Studios.

As we noted last week, talk of a potential major consolidation in the media space will also like bring with it discussions of the broader market and economic cycle, as mega media deals marked the top of both the tech bubble and pre-financial crisis bull runs.

What America’s biggest companies said this quarter

Third quarter earnings season is winding down, and on Wednesday, analysts at Goldman Sachs released their quarterly “Beige Book” to give investors an overview of what some of the biggest companies in the U.S. were talking about on earnings calls.

Goldman takes this report’s name from the Federal Reserve’s Beige Book, which is a collection of economic anecdotes from each of the Fed’s 12 districts.

The main themes in the third quarter are likely not surprising to most — taxes, the economy, and what companies are planning to do with their cash.

On Thursday, the House passed its version of a plan to cut corporate taxes, though hurdles still remain to get a deal through the Senate. Most managements, however, “expressed optimism” that something will get done on lower corporate taxes, even if the details remain uncertain, according to Goldman.

House Speaker Paul Ryan of Wis., left, leads applause for House Ways and Means Chair Rep. Kevin Brady, R-Texas, along with Rep. Carlos Curbelo, R-Fla., and Rep. Cathy McMorris Rodgers, R-Wash., during a news conference following a vote on tax reform on Capitol Hill in Washington, Thursday, Nov. 16, 2017. (AP Photo/Jacquelyn Martin)

“Tax reform or, simply, tax cuts have a higher chance of passage than major healthcare reform did or does,” said executives from Ventas (VTR), a real estate investment trust with a market cap near $23 billion. “While the specific outcomes of tax reform are too early to call, we are ready to optimize our opportunities as soon as the final framework emerges.”

Executives at Hilton (HLT) said they are “much more optimistic” now than they were last quarter on something getting done on taxes, adding that a main impact of lower taxes is “psychology, which matters and that is the business community and others feeling better about where the economy is going.” The company added that this could get positive impacts flowing into the economy fairly quickly.

Executives from JP Morgan (JPM), however, don’t see tax reform holding the economy back right now, despite the uncertainty that some investors have argued the current wrangling in Washington, D.C. creates.

“Tax reform… at this point it’s not front-and-center in the dialogue we’re having with our clients about whether they should or shouldn’t do a strategic deal or take an action,” the firm said. This commentary echoes what Goldman CFO Marty Chavez said last month, when he said the firm’s clients agree that tax reform — that is, lower taxes — would be great, but that this potential change isn’t holding back the consideration of any strategic deals or acquisitions.

Myles Udland is a writer at Yahoo Finance. Follow him on Twitter @MylesUdland

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