Markets fall on fears of higher capital gains tax

Dow dropped 322, decliners over advancers 3-2 & NAZ retreated 131.  The MLP index fell 1 to 171 & the REIT index lost a fraction to 126.  Junk bond funds fluctuated & Treasuries were bid a little higher.  Oil went up in the 61s & gold dropped 11 to 1781 (more on both below).

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AT&T (T) added more cellphone users, fiber-optic internet customers & HBO viewers during in Q1, showing the media-&-telecom conglomerate's focus on growth as the economy starts to roar back after a year of coronavirus-related pressure.  The company reported 44.2M domestic HBO & HBO Max subscribers, up from 41.5M 3 months earlier, as its media division sought to gain on rivals.  That figure included viewers who signed up for the company's new online streaming video service as well as those with older subscriptions to HBO through a cable-TV provider.  In the US wireless business, AT&T's core profit engine, the company added 595K postpaid phone subscribers, a highly valued category of customers who are billed for monthly service after-the-fact.  The carrier also posted a net gain of 207K prepaid phone subscribers.  EPS was $1.04, up from 63¢ a year earlier.  The most recent earnings result benefited from a large on-paper actuarial gain on the value of its employee-benefit plans.  Total revenue rose 2.7% to $43.9B.  AT&T said that its debt levels will decline in the coming years as asset sales & revenue growth whittle down its obligations.  The company also affirmed its commitment to sustaining its div at current levels.  The stock went up 1.25.
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AT&T's revenue rises as wireless unit, HBO add customers

Scientists at Texas A&M University’s Global Health Research Complex say they've detected a new Covid-19 variant that shows signs of a more contagious strain that causes more severe illness & appears to be resistant to antibodies.  The new variant, BV-1, named after its Brazos Valley origin, was found during Texas A&M's routine coronavirus screening via saliva sample in a young student who had mild cold-like symptoms.  The student tested positive for Covid on Mar 5 & tested positive again on Mar 25, showing that the new strain may cause a longer infection in younger people.  The student's symptoms resolved by Apr 2 & a 3rd test on Apr 9 came back negative.  Texas A&M scientists say that cell culture-based experiments from other labs have shown that several neutralizing antibodies had no effect in controlling other variants with the same genetic markers as BV-1.  “We do not at present know the full significance of this variant, but it has a combination of mutations similar to other internationally notifiable variants of concern,” said Texas A&M Chief Virologist Ben Neuman.  “This variant combines genetic markers separately associated with rapid spread, severe disease and high resistance to neutralizing antibodies.”  The scientists also say they have submitted a paper on BV-1 to the Centers for Disease Control & Prevention to alert officials before it spreads further.  The lab has identified many Covid mutations through its genetic sequencing program, but Neuman said the genetic makeup of this strain is particularly concerning.

New Covid variant detected at Texas A&M lab shows signs of antibody resistance and severe illness

Gold futures finished lower for the first time in 3 sessions, after pushing to a nearly 2-month high a day earlier, as investors weighed surging COVID-19 cases particularly in Asia.  Gold for Jun lost $11 (0.6%) to settle at $1782 an ounce.  Gold had settled at $1793 yesterday, its highest level in nearly 2 months, with gains attributed in part to a fall in Treasury yields.  Falling yields can be a positive for gold, reducing the opportunity cost of holding it & other commodities that don't offer yields.  Gold prices briefly pared losses in the immediate aftermath of the weekly US jobless claims data, then headed toward session lows.  Jobless benefit claims fell to 574K last week from a revised 586K a week earlier, the Labor Dept said.  Also, the Conference Board said the index of US leading economic indicators rose 1.3% in Mar.  Existing home-sales fell 3.7% to a seasonally-adjusted, annual rate of 6.01M last month, the National Association of Realtors reported, but median home prices rose by 17%.  Meanwhile, the ECB, as expected, left interest rates unchanged & made no changes to its bond-buying efforts.

Gold marks first loss in 3 sessions

India reported a record number of daily Covid-19 cases as the country's 2nd wave of coronavirus shows no signs of slowing down.  There were 314k new cases over a 24-hour period, according to gov data.  That surpassed the word's previous highest single-day increase in cases held by the US.  There were 2104 deaths reported deaths.  India's first wave of infection peaked around Sep following last year’s national lockdown between late-Mar & May, which had significant economic consequences.  Cases began rising again in Feb & in the subsequent months large crowds, mostly without masks, gathered for religious festivals & political rallies.  So far in Apr, India has reported more than 3.8M new cases & over 22K deaths.

India reports record single-day jump in Covid cases, with over 314,000 infections 

Pres Biden will seek to raise taxes on millionaire investors to fund education & other spending priorities as part of the administration's effort to overhaul the US economy.  As part of the plan, Biden will seek an increase to the tax on capital gains to 39.6% from 20% for those Americans earning more than $1M.  The capital gains tax is especially important to investors since it dictates how large a chunk of an equity sale is collected by the federal gov.  The proposal would make good on Biden's campaign promise to require America's wealthiest households to contribute more as a percentage of their income.  This plan would bring the capital gains tax rate & the top individual income tax rate, currently at 37%, to near parity.  The pres is expected to release the proposal formally next week as a way to fund spending in the upcoming American Families Plan, expected to come in around $1T.  The American Families Plan is expected to include measures aimed at helping US workers learn new skills, expand subsidies for child care & make community college tuition free for all.

Biden to propose capital gains tax of 39.6% to fund education and child care, reports say

Oil futures finished with a slight gain, after falling to their lowest intraday levels in more than a week before reversing course, as traders tried to assess the impact on energy demand of the recent surge in COVID-19 cases in Asia.  West Texas Intermediate crude for Jun tacked on 8¢ to settle at $61.43 a barrel after tapping a low at $60.61.  Jun Brent, the global benchmark, also added 8¢ at $65.40 a barrel.  Prices for both crude benchmarks touched their lowest intraday levels since Apr 14, but they trade more than 25% higher YTD. 

Oil prices finish with a modest gain after slipping to a more than 1-week low

Higher taxes, especially on capital gains, are never welcomed by investors.  The averages were doing well until that announcement was made.  Then the Dow dropped 400 in 1 hour but late day buying trimmed the loss.  More difficulties on the virus front are another major worry for investors.

Dow Jones Industrials