Dow was up 5 (good enough for another record), decliners modestly ahead of advancers & NAZ fell 193. The MLP index inched up to the 274s & the REIT index was off fractionally to 355. Junk bond funds slid lower & Treasuries had a modest rally. Oil declined & gold was up 4 to 1288.
AMJ (Alerian MLP Index tracking fund)
![Live 24 hours gold chart [Kitco Inc.]](https://www.kitco.com/images/live/gold.gif?0.40887799500783895)
Rep tax writers are considering a compromise measure that would allow individuals to keep deducting the cost of the property taxes they pay while eliminating a larger tax break for their other state & local taxes, according to a GOP member of Congress. The measure is aimed at appeasing roughly 2 dozen Rep House members from high-tax areas who have raised concern that eliminating the state & local tax break entirely would hurt taxpayers in their districts. Current law allows individuals to deduct their state & local tax payments, & eliminating that break in full would raise an estimated $1.3T over 10 years, an amount Reps need to offset the deep tax-rate cuts they've proposed. Retaining the ability to deduct property taxes would cost about $300B of that revenue. Individuals would lose the deduction on state & local income taxes. Pres Trump's administration, which proposed eliminating the so-called SALT deduction in Apr, has indicated willingness to compromise on the issue. The GOP tax framework that was released last month would cut the corp income tax rate to 20% from 35% & consolidate the existing 7 individual tax rates to 3 or 4, leaving it up to congressional committees to decide. They also propose to cut the top rate on income from partnerships, limited liability companies and other “pass-through” businesses to 25% from 39.6%. Many Reps favor eliminating the state & local tax break entirely, arguing that it's inappropriate for the federal gov to subsidize tax increases by state & local officials. The tax break is used most frequently in high-tax states that tend to vote for Dems, including NY & California, but dozens of Rep House members in such states have sought to retain the break in some form.
GOP Considers State Tax Break Bargain on Property Levies
Verizon shares (VZ), a Dow stock, rose after its results showed its wireless business doing a little better. The largest US wireless carrier said that it added 603K customers who pay a bill at the end of each month, more than expected. VZ added more new smartphone customers than in Q3 a year ago. Revenue from selling wireless service plans declined 5.1% from the year before, but that was a slightly shallower drop than it was in the prior qtr. The company lost wireless customers who are billed each month, the most lucrative wireless customer, in Q2 for the first time in its history. It has bounced back from that with the help of the unlimited plan it introduced in Feb, following other carriers' focus on unlimited plans. In the cable business, it lost 18K video customers, compared with a gain of 36K a year ago, as more consumers shift to getting their video from online sources. VZ added home Fios internet customers. Q3 profit was almost unchanged at 89¢. Adjusted EPS for one-time costs, some related to mergers, was 98¢, meeting expectations. Revenue rose 2.5%, to $31.72B, edging past the forecast. The stock went up 58¢.
If you would like to learn more about VZ, click on this link:
club.ino.com/trend/analysis/stock/VZ?a_aid=CD3289&a_bid=6ae5b6f7
United Airlines (UAL) shares fell sharply after it released disappointing forecasts for the 4th qtr. At the quarterly earnings call, execs faced pointed questions on the carrier's forecast performance in the current qtr. "We have dug ourselves in a hole from a competitive perspective," CEO Oscar Munoz said in response to a grilling on the call with media & investors. The airline expects passenger revenue per available seat mile, a closely-watched measurement of an airline's performance, to decline 1-3% in the current qtr, while many investors & analysts had expected growth. The carrier forecast its pre-tax margin would be 3-5%, falling below what many analysts had predicted. The 4th-qtr financials are up against a number of hurdles, including some holiday travel demand shifting from Dec to Jan, increased competition from ultra-low-cost carriers in some of their hubs & finding equilibrium in capacity growth. UAL has had to sharply discount fares in some of its key markets because of creeping competition from low-cost rivals. Q3 net income fell slightly less than investors had feared as the airline was hit by $185M in pretax losses caused by canceled flights during the particularly severe Atlantic hurricane season. Higher fuel costs, a rocky rollout of the carrier's tiered fare program & the lingering effects of hurricane season have also weighed on the bottom line, worrying investors & complicating the carrier's financial outlook over the next few months. The stock tumbled 8.25 to the 59s.
If you would like to learn more about UAL, click on this link:
club.ino.com/trend/analysis/stock/UAL?a_aid=CD3289&a_bid=6ae5b6f7
Oil prices slipped, pressured by larger-than-expected product inventories in the US & some profit-taking after a recent run-up in oil benchmarks. Ongoing tension in the Middle East has kept a bid under the market, however, as reduced flows from the Iraqi Kurdish pipeline thru Turkey have raised worries about supply. US light crude lost 45¢ to $51.59, but is still almost 25% higher than the Jun lows. Analysts said they have seen some profit-taking after 2 weeks of gains as upward momentum in prices appears to be waning. Energy equities were also weaker, falling to 3½ week lows. The Energy Information Administration said that US crude inventories fell by 5.7M barrels in the latest week. US output slumped by 11% from the previous week to 8.4M barrels per day (bpd), lowest since Jun 2014, as production was shut in by Hurricane Nate.
Oil slips from recent gains, though Middle East tensions remain high
This was a day meant for profit taking. However the stock market held up fairly well. The Dow was held back by Apple's (AAPL) decline of 3+ on signals of disappointing demand for its iPhones. The chart below shows a very impressive 1 year advance with hardly bump along the way. Congress has a lot of work to get done, but tax reform is the most critical for the stock market. At least those guys are talking about it.
Dow Jones Industrials
AMJ (Alerian MLP Index tracking fund)
Rep tax writers are considering a compromise measure that would allow individuals to keep deducting the cost of the property taxes they pay while eliminating a larger tax break for their other state & local taxes, according to a GOP member of Congress. The measure is aimed at appeasing roughly 2 dozen Rep House members from high-tax areas who have raised concern that eliminating the state & local tax break entirely would hurt taxpayers in their districts. Current law allows individuals to deduct their state & local tax payments, & eliminating that break in full would raise an estimated $1.3T over 10 years, an amount Reps need to offset the deep tax-rate cuts they've proposed. Retaining the ability to deduct property taxes would cost about $300B of that revenue. Individuals would lose the deduction on state & local income taxes. Pres Trump's administration, which proposed eliminating the so-called SALT deduction in Apr, has indicated willingness to compromise on the issue. The GOP tax framework that was released last month would cut the corp income tax rate to 20% from 35% & consolidate the existing 7 individual tax rates to 3 or 4, leaving it up to congressional committees to decide. They also propose to cut the top rate on income from partnerships, limited liability companies and other “pass-through” businesses to 25% from 39.6%. Many Reps favor eliminating the state & local tax break entirely, arguing that it's inappropriate for the federal gov to subsidize tax increases by state & local officials. The tax break is used most frequently in high-tax states that tend to vote for Dems, including NY & California, but dozens of Rep House members in such states have sought to retain the break in some form.
GOP Considers State Tax Break Bargain on Property Levies
Verizon shares (VZ), a Dow stock, rose after its results showed its wireless business doing a little better. The largest US wireless carrier said that it added 603K customers who pay a bill at the end of each month, more than expected. VZ added more new smartphone customers than in Q3 a year ago. Revenue from selling wireless service plans declined 5.1% from the year before, but that was a slightly shallower drop than it was in the prior qtr. The company lost wireless customers who are billed each month, the most lucrative wireless customer, in Q2 for the first time in its history. It has bounced back from that with the help of the unlimited plan it introduced in Feb, following other carriers' focus on unlimited plans. In the cable business, it lost 18K video customers, compared with a gain of 36K a year ago, as more consumers shift to getting their video from online sources. VZ added home Fios internet customers. Q3 profit was almost unchanged at 89¢. Adjusted EPS for one-time costs, some related to mergers, was 98¢, meeting expectations. Revenue rose 2.5%, to $31.72B, edging past the forecast. The stock went up 58¢.
If you would like to learn more about VZ, click on this link:
club.ino.com/trend/analysis/stock/VZ?a_aid=CD3289&a_bid=6ae5b6f7
Verizon shares rise as it adds wireless customers
United Airlines (UAL) shares fell sharply after it released disappointing forecasts for the 4th qtr. At the quarterly earnings call, execs faced pointed questions on the carrier's forecast performance in the current qtr. "We have dug ourselves in a hole from a competitive perspective," CEO Oscar Munoz said in response to a grilling on the call with media & investors. The airline expects passenger revenue per available seat mile, a closely-watched measurement of an airline's performance, to decline 1-3% in the current qtr, while many investors & analysts had expected growth. The carrier forecast its pre-tax margin would be 3-5%, falling below what many analysts had predicted. The 4th-qtr financials are up against a number of hurdles, including some holiday travel demand shifting from Dec to Jan, increased competition from ultra-low-cost carriers in some of their hubs & finding equilibrium in capacity growth. UAL has had to sharply discount fares in some of its key markets because of creeping competition from low-cost rivals. Q3 net income fell slightly less than investors had feared as the airline was hit by $185M in pretax losses caused by canceled flights during the particularly severe Atlantic hurricane season. Higher fuel costs, a rocky rollout of the carrier's tiered fare program & the lingering effects of hurricane season have also weighed on the bottom line, worrying investors & complicating the carrier's financial outlook over the next few months. The stock tumbled 8.25 to the 59s.
If you would like to learn more about UAL, click on this link:
club.ino.com/trend/analysis/stock/UAL?a_aid=CD3289&a_bid=6ae5b6f7
United Airlines shares tumble as 4Q guidance underwhelms
Oil prices slipped, pressured by larger-than-expected product inventories in the US & some profit-taking after a recent run-up in oil benchmarks. Ongoing tension in the Middle East has kept a bid under the market, however, as reduced flows from the Iraqi Kurdish pipeline thru Turkey have raised worries about supply. US light crude lost 45¢ to $51.59, but is still almost 25% higher than the Jun lows. Analysts said they have seen some profit-taking after 2 weeks of gains as upward momentum in prices appears to be waning. Energy equities were also weaker, falling to 3½ week lows. The Energy Information Administration said that US crude inventories fell by 5.7M barrels in the latest week. US output slumped by 11% from the previous week to 8.4M barrels per day (bpd), lowest since Jun 2014, as production was shut in by Hurricane Nate.
Oil slips from recent gains, though Middle East tensions remain high
This was a day meant for profit taking. However the stock market held up fairly well. The Dow was held back by Apple's (AAPL) decline of 3+ on signals of disappointing demand for its iPhones. The chart below shows a very impressive 1 year advance with hardly bump along the way. Congress has a lot of work to get done, but tax reform is the most critical for the stock market. At least those guys are talking about it.
Dow Jones Industrials
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