Appropriately, with the latest installment of the "Star Wars" franchise opening in cinema theaters around the country, Wall Street sensed a disturbance in the "force," the force being Janet Yellen and her merry band of storm trooping central bankers, the disturbance being upstart senator "little" Marco Rubio, who inadvisably pondered that he may not cast his vote in favor of the magnificent GOP tax plan that's been bandied about the halls of congress for months.
The former presidential candidate and current senator from Florida, Rubio voiced concerns over a minuscule detail in the overall grand scheme, the child tax credit, and on Friday morning made it clear that unless the amount of the credit that is deductible ($1,100 of $2,000) is increased, he's voting against the plan.
Notwithstanding Rubio's need to be seen, heard and appear important on occasion, his grandstanding is purely designed as entertainment value over the weekend for the cable news outlets. A final rollout of the bill and votes will come next week, just prior to congress' two-week holiday vacation.
Also adding to the folly is John McCain, who was hospitalized this week with complications from his cancer treatment, may not be present for a vote, should his condition worsen. Republicans cannot survive more than two defections, and Senator Bob Corker, the statist senator from Tennessee is staunchly opposed to the measure, purely out of hatred for president Trump.
Failure of the bill's passage would be a blow to Wall Street being that the measure approves a reduction of corporate taxes from 35 percent to 21 percent, something for which major corporations - many of which pay little to no federal tax already - have been lobbying for years.
Thus, with doubt overshadowing the happy passage of bellwether legislation, stocks took a notable turn for the worse on Thursday. The loss ended a string of five straight days higher on the Dow, and an overall run-up from 23,200 to beyond 24,600 over the past month.
As is the usual case, there's probably nothing about which to worry, since the Fed has Wall Street's back, front, and middle, and little tolerance for anything more than a few hundred point drop on the hallowed Dow Jones Industrial Average.
With Christmas a little more than a week away, neither congress, the Fed, nor Wall Street want to appear as Scrooges or Grinches, much less a poor likeness of Darth Vader or the death planet, especially with heavy upside bets on options and futures, which expire today. Trying not to mix metaphors - but failing badly - Friday is a quad witching day.
Happy trading, and happy Friday.
At the Close, Thursday, December 14, 2017:
Dow: 24,508.66, -76.77 (-0.31%)
NASDAQ: 6,856.53, -19.27 (-0.28%)
S&P 500: 2,652.01, -10.84 (-0.41%)
NYSE Composite: 12,629.07, -70.41 (-0.55%)
Showing posts with label John McCain. Show all posts
Showing posts with label John McCain. Show all posts
Friday, December 15, 2017
Saturday, November 11, 2017
Stocks Slide for Week as Wall Street Sees Little Hope for Tax Reform
For the week, the Dow Jones Industrial Average declined 0.50% finishing with its first weekly decline after eight straight weekly gains, though the blue chip index remained less than 150 points from an all-time closing high set on Wednesday, November 8.
The S&P 500 finished the week lower as well, but only marginally so. It was the S&P's first weekly decline in nine weeks. The NASDAQ posted its first weekly loss in seven weeks. Both the NASDAQ and S&P closed at record highs on Wednesday as well.
The one index that did not reach record highs during the week past was also the broadest. The NYSE Composite index closed down for the second week in the past three, but those losses were more than offset by gains in the prior six weeks.
In general, analysts blamed congress for the poor performance in equities, citing the lack of a clear path to a tax overhaul that was a cornerstone of President Trump's winning strategy of a year ago. The House and Senate both introduced measures that vary widely and seem unlikely to offer much in the way of relief for individuals or businesses. Rolled out on Thursday, the Senate version pushes for a permanent (until they change it) tax rate of 20% for corporations, but delays implementing the proposed rate until 2019.
Both versions increase the standard deduction to $12,000 for individuals and $24,000 for married couples filing joint returns, but the congress and the media fail to mention that both versions cut out the personal exemption, which was $4,050 in 2016. That leaves the net gain for most single taxpayers at $1,650, and $3,300 for couples.
The standard deduction for 2016 was $6300 for singles, and $12,600 for married couples.
With Democrats generally understood to oppose any Republican plan, the chances for passage this year of either bill remain slim. President Trump and conservative leaders in the Senate face any number of challenges from the likes of Ted Cruz, John McCain, Bob Corker and others who have either stated their opposition to the measures or are likely to vote against any changes to the intricate, pitfall-ridden federal income tax code.
As far as Wall Street is concerned, lowering the corporate tax and the tax on offshore profits are at the top of the wish list, but, little is being done to address their concerns with a congress largely already focused on being re-elected in the 2018 midterms, now less than a year away.
It has become more than obvious to most Americans that congress is an inept, bought-and-paid body, loyal only to special interests which fund their expensive campaigns. Any thoughts of providing relief to beleaguered taxpayers or companies are beyond their admittedly limited legislative scope.
Thus, investors should treat any talk of reform coming from the mouths of elected officials in Washington as nothing more than make believe rhetoric, designed solely to make themselves appear to be working when they are, in fact, not.
At the Close, Friday, November 10, 2017:
Dow: 23,422.21, -39.73 (-0.17%)
NASDAQ: 6,750.94, +0.89 (+0.01%)
S&P 500: 2,582.30, -2.32 (-0.09%)
NYSE Composite: 12,322.60, -17.06 (-0.14%)
For the Week:
Dow: -116.98 (-0.50%)
NASDAQ: -13.50 (-0.20%)
S&P 500: -5.54 (-0.21%)
NYSE Composite: -50.46 (-0.41%)
The S&P 500 finished the week lower as well, but only marginally so. It was the S&P's first weekly decline in nine weeks. The NASDAQ posted its first weekly loss in seven weeks. Both the NASDAQ and S&P closed at record highs on Wednesday as well.
The one index that did not reach record highs during the week past was also the broadest. The NYSE Composite index closed down for the second week in the past three, but those losses were more than offset by gains in the prior six weeks.
In general, analysts blamed congress for the poor performance in equities, citing the lack of a clear path to a tax overhaul that was a cornerstone of President Trump's winning strategy of a year ago. The House and Senate both introduced measures that vary widely and seem unlikely to offer much in the way of relief for individuals or businesses. Rolled out on Thursday, the Senate version pushes for a permanent (until they change it) tax rate of 20% for corporations, but delays implementing the proposed rate until 2019.
Both versions increase the standard deduction to $12,000 for individuals and $24,000 for married couples filing joint returns, but the congress and the media fail to mention that both versions cut out the personal exemption, which was $4,050 in 2016. That leaves the net gain for most single taxpayers at $1,650, and $3,300 for couples.
The standard deduction for 2016 was $6300 for singles, and $12,600 for married couples.
With Democrats generally understood to oppose any Republican plan, the chances for passage this year of either bill remain slim. President Trump and conservative leaders in the Senate face any number of challenges from the likes of Ted Cruz, John McCain, Bob Corker and others who have either stated their opposition to the measures or are likely to vote against any changes to the intricate, pitfall-ridden federal income tax code.
As far as Wall Street is concerned, lowering the corporate tax and the tax on offshore profits are at the top of the wish list, but, little is being done to address their concerns with a congress largely already focused on being re-elected in the 2018 midterms, now less than a year away.
It has become more than obvious to most Americans that congress is an inept, bought-and-paid body, loyal only to special interests which fund their expensive campaigns. Any thoughts of providing relief to beleaguered taxpayers or companies are beyond their admittedly limited legislative scope.
Thus, investors should treat any talk of reform coming from the mouths of elected officials in Washington as nothing more than make believe rhetoric, designed solely to make themselves appear to be working when they are, in fact, not.
At the Close, Friday, November 10, 2017:
Dow: 23,422.21, -39.73 (-0.17%)
NASDAQ: 6,750.94, +0.89 (+0.01%)
S&P 500: 2,582.30, -2.32 (-0.09%)
NYSE Composite: 12,322.60, -17.06 (-0.14%)
For the Week:
Dow: -116.98 (-0.50%)
NASDAQ: -13.50 (-0.20%)
S&P 500: -5.54 (-0.21%)
NYSE Composite: -50.46 (-0.41%)
Wednesday, November 8, 2017
Stocks Hit Roadblock as House Tax Plan Falters in Senate
With Rand Paul absent due to injury, senators John McCain and Ted Cruz already announced no votes, the much-ballyhooed house-Trump tax plan looks to be dead on arrival and investors are not pleased.
Tuesday's action in the markets were punctuated by a pronounced leveling of the yield curve, with 2-10 and 5-30 spreads plumbing new lows.
Just in case the bickering in Washington continues towards implosion - a highly likely event horizon - with Democrats aligning with no-vote Republicans, forward looking people will next look to the upcoming December deadline for the debt ceiling and an anticipated increase to the federal funds rate by the Fed's FOMC.
That's putting pressure on stocks as the market opens Wednesday, though the declines are far from substantial. Also of note is crude oil's decline off recent three-year highs, while precious metals continue to the upside, a split in the commodity complex.
President Trump continues his extensive Pacific tour, in China for the time being, as news flow should slow to a crawl as the week closes in on Friday. With stocks fluctuating, it may be time to seek out undervalued equities, if any are to be found. Stocks remain wildly overpriced with backing by central banks preventing any potential cascading declines.
At the Close, Tuesday, November 7, 2017:
Dow: 23,557.23, +8.81 (+0.04%)
NASDAQ: 6,767.78, -18.65 (-0.27%)
S&P 500: 2,590.64, -0.49 (-0.02%)
NYSE Composite: 12,371.25, -29.68 (-0.24%)
Tuesday's action in the markets were punctuated by a pronounced leveling of the yield curve, with 2-10 and 5-30 spreads plumbing new lows.
Just in case the bickering in Washington continues towards implosion - a highly likely event horizon - with Democrats aligning with no-vote Republicans, forward looking people will next look to the upcoming December deadline for the debt ceiling and an anticipated increase to the federal funds rate by the Fed's FOMC.
That's putting pressure on stocks as the market opens Wednesday, though the declines are far from substantial. Also of note is crude oil's decline off recent three-year highs, while precious metals continue to the upside, a split in the commodity complex.
President Trump continues his extensive Pacific tour, in China for the time being, as news flow should slow to a crawl as the week closes in on Friday. With stocks fluctuating, it may be time to seek out undervalued equities, if any are to be found. Stocks remain wildly overpriced with backing by central banks preventing any potential cascading declines.
At the Close, Tuesday, November 7, 2017:
Dow: 23,557.23, +8.81 (+0.04%)
NASDAQ: 6,767.78, -18.65 (-0.27%)
S&P 500: 2,590.64, -0.49 (-0.02%)
NYSE Composite: 12,371.25, -29.68 (-0.24%)
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