Dow was off 41, decliners over advancers 4-3 & NAZ added 21. The MLP index rose 2 to the 209s & the REIT index went up 1 to the 455s. Junk bond funds drifted lower & Treasuries had limited selling. Oil climbed in the 72s & gold inched up 1 to 1858.
AMJ (Alerian MLP index tracking fund)
|
|
Treasury Secretary Janet Yellen made the case for Congress to approve Pres Biden's
massive $6T budget, warning the US economy faced a series of
"long-term, structural" challenges that hindered Americans' ability to
make a good living. "These destructive forces – the divergence in wages and of geographic
regions, the decline in labor force participation, the rise of climate
change, and the persistence of racial inequality – all these are
combining to block tens of millions of Americans from the prosperous
parts of our economy," Yellen said while testifying before the
Senate Finance Committee. The fiscal 2022 budget request – the
first of Biden's presidency – includes roughly $4T in new
spending, some of which would go toward drastically expanding the
social safety net. To fund the various proposals, Biden has pushed
for a slew of tax hikes, including: raising the corp tax rate to
28% from 21%, nearly doubling the capital gains tax rate paid by wealthy
Americans to 39.6% from 20%, restoring the top individual income tax
rate to 39.6%, closing the stepped-up basis at death & imposing a
global minimum of 15% on US companies foreign profits.
Yellen pushes Biden's massive budget, issues warning about the economy
US homebuilding bounced back in May as lumber prices pulled back from record highs. Housing starts rose 3.6% to a seasonally adjusted annual rate of 1.57M last month, the Commerce Dept said. Apr's reading was revised lower to 1.52M from 1.57M. The forecast had expected housing starts to rise to 1.63M. Starts surged 50% on a year-over-year basis in May. Homebuilding rose in the Midwest, South & West but fell in the Northeast. The slight increase in homebuilding came as lumber prices topped out on May 7 & fell 22% through the end of the month, finishing below where they ended Apr. A lumber shortage that developed in the aftermath of COVID-19 lockdowns caused the cost of the critical material to soar, resulting in builders putting off projects & losing confidence. Permits for future construction slipped 3% to a rate of 1.68M units in May, missing the 1.7M units that was expected. The drop in builder confidence was reflected in the latest National Association of Homebuilder's/Wells Fargo Housing Market Index released yesterday. The index fell 2 points in Jun to 81, a 10-month low.
Homebuilding bounces back as lumber prices cool
US CEOs are concerned that raising the corp tax rate could negatively affect the competitiveness of US companies & may ultimately backfire on shareholders & employees. Business Roundtable Tax & Fiscal Policy Committee Chair Gregory Hayes said raising the corp tax rate would "have significant adverse effects on hiring and investment plans" while also likely affecting economic growth. "We urge policymakers to seize the opportunity at hand and compromise on a bipartisan infrastructure package for the benefit of American workers and families," Hayes added. The Business Roundtable said increasing the corp tax to 28% from 21%, as proposed by Pres Biden to pay for spending initiatives, would undermine the competitiveness of US companies & would ultimately be borne by shareholders & company employees. 98% of participants said the tax hike would have moderate to significant effect on their company’s competitiveness, a previous survey conducted by the group found. 2/3 of CEOs said it could slow wage growth for employees. When it comes to the global minimum tax, which Biden promoted alongside the Group of 7 finance ministers over the weekend, Hayes noted that not all countries around the world have the same infrastructure to support business opportunities as the US & therefore sometimes use lower tax rates as an incentive. He said it would, however, be beneficial for US multinationals to have a consistent global tax regime. The Business Roundtable released its Q2 CEO Economic Outlook, detailing record hiring plans. ¾ of participants said conditions for their companies have either already recovered, or would recover to pre-pandemic levels by the end of the year. The Business Roundtable released its Q2 CEO Economic Outlook, detailing record hiring plans. CEOs also projected a 5% growth rate for the year, which is higher than what they estimated in Q1.
CEOs warn corporate tax hike could backfire on employees
Janet's testimony was not heartwarming for investors, being far different than what top CEOs are looking at. However today comments by the Fed later will get the most attention. No changes are expected but thinking about the timing of higher interest rates is what investors are interested in.
Dow Jones Industrials
No comments:
Post a Comment