E Market Briefing For Monday, Apr. 26

Aspirational investors  are stunned by the market segmentation with little if any feel for seasonality; liquidity sources; or external influences. Sure, we can well see a so-called 'Summer rally'; if circumstances work out optimally; while of course the consideration about taxes (and Covid) may influence prospects.

This is all in context of increasing corporate taxes, as might 'sterilize' stimulus impacts on the markets and economy too.  As upward influences are mitigated you lose some of the tailwinds which supported our S&P move of over a year.

At the same time there might be upside in muni's and other areas 'if' we get a run-up in rates (officially the Fed defies that; but they're not the entire story.. a huge part though.. when it comes to credit markets). Financial engineering by the Federal Government is meddling beyond what we need to achieve; and of course there's a risk (eventually) of 'capital' going on-strike if serious taxation moves occur; that are unlike a tax act of decades ago which raised corporates but actually lowered individuals, including capital gains; stoking the economy.

This would be a huge change if legislated in the way it was presented; and is unlikely to emerge that way; but the market can be reticent until it's clarified a good bit more. Remember; the devil is in the details, which aren't known yet.

Executive Summary:

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Roger Keats 2 weeks ago Member's comment