E $134 Billion In Fiscal Flows Removed From The Economy In Just Three Days

Recently, we have pointed out that Fiscal flows in the US during the latter half of the month of April could potentially put downward pressure on the stock market (all other variables being equal).  Below are listed the deposits/withdrawals of the US Treasury for the dates April 11, 12, 15, and 16.

Notice how the Federal Tax Deposits (FTD) increase as we move down the calendar, and the Change in the Operating Cash Balance goes from a negative value of -$24B on April 11 (which means $24B was added to the economy) to a net increase of +$22B, +$73.9B, and +$38B on April 12, 15, 16, respectively (which means that $134B was removed from the economy in just 3 days).

April 11, 2019

(Click on image to enlarge)

(Click on image to enlarge)

 

April 12, 2019

 

(Click on image to enlarge)

(Click on image to enlarge)

 

April 15, 2019

 

(Click on image to enlarge)

(Click on image to enlarge)

 

April 16, 2019

(Click on image to enlarge)

 

 

(Click on image to enlarge)

 

This withdrawal and cancellation of money from the economy takes a couple of weeks to show up in the stock market.  We expect to see some weakness in stocks heading into May, but a resurgent rally after that as tax refunds start to be sent out.

How did you like this article? Let us know so we can better customize your reading experience.

Comments

Leave a comment to automatically be entered into our contest to win a free Echo Show.
Gary Anderson 2 years ago Contributor's comment

Why would someone wait this late to get a tax refund? Good info, though.

ANG Traders 2 years ago Author's comment

The "why" is not important. The "what" is important, and the "what" is the fact that money is being pulled out of the economy and cancelled.

Gary Anderson 2 years ago Contributor's comment

I am sorry. I meant that most people who get refunds file earlier. Yes, your information about the funds flow is very interesting.

ANG Traders 2 years ago Author's comment

It IS interesting.

Thank you for reading and taking the time to comment

Corey Gaber 2 years ago Member's comment

Holy Moly!

ANG Traders 2 years ago Author's comment

$300B (net) will be removed from the economy during tax season. Unless there is massive credit creation, this will impact markets...and provide a buy-the-dip opportunity.

Adam Reynolds 2 years ago Member's comment

Crazy,