Tax proposals from as recently as June 2021 have changed. The stuff that could fall under this topic has filled months and months of news coverage. Today I will focus on some interesting ones you should be aware of. I’ll keep it brief, just so that you know we’re monitoring it for you. The ABCs of ETFs When relevant, I use this column to tell you the trades I made in my portfolios. Readers know that I primarily use exchange-traded funds (ETFs). I use ETFs for a few reasons. ETFs are usually “passive” investments that track indices. If you look at the…
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The Dip Buyers return
Last week, investors suffered through the gloom and doom of a declining market. Many Wall Street equity strategists added to the angst by predicting terrible times ahead. I begged to differ, counting on dip buyers to save the day once again. And that is exactly what happened. In case you missed it, last Friday, the S&P 500 Index was at an important level, hovering just below its 50 Day Moving Average (DMA). This had happened several times before since March 2020, and each time buyers appeared to “buy the dip.” “I suspect they will again,” I wrote, “so, no, I…
Weather worsens global trade
Changes in climate are impacting a global economy that is fighting to recover from a pandemic. Supply chain bottlenecks continue to worsen as continuous weather-related catastrophes close ports and snarl land, sea, and air transportation routes. Can it get any worse? Yes, and it probably will, according to climate experts. Nearly all actively publishing climate scientists agree that humans are causing global warming and climate change. The less than 2% of experts that disagree have published contrarian studies that either cannot be replicated or contain errors. I’ll go with the consensus on this issue. Here in the U.S., we receive…
Video: The Future
Are mandatory vaccinations legal?
Gross Domestic Product (GDP) is the broadest measure of economic growth. The U.S. GDP grew 6.4% in the previous quarter. By any standards, that’s a remarkable growth rate. GDP for this quarter has dropped precipitously to a forecasted rate of 3.7%. At the start of the quarter, there were growth expectations of 6.5% from Oxford Economics and Morgan Stanley. Typically, a 3.7% growth rate would be considered exceptional. However, measuring a $21 trillion economy is complicated and includes some mathematical estimates. I won’t run us through the calculation, but here’s the gist of it: the demand had been so significant that…
Markets enter the danger zone
It has been a bumpy week for stocks, and it could get worse if you believe the headlines of the financial press. The issue I see is that just about everyone is expecting a nasty period ahead for equities. That makes me somewhat bullish. Calling short-term market moves in this environment is akin to fortune-telling. It is short on analysis, and long on my gut feelings. Granted, I too, have been warning folks that the September-October 2021 time period has been a seasonally difficult time for equities. My column last week addressed the possibility of a 5-10% correction, and what…
Moderates winning on tax debate
For months, wealthy U.S. taxpayers and corporations have been living with the specter of higher taxes under the Biden administration. It is a pretty good bet that taxes will go up, but not as much as you might expect. Throughout the week, Democrats in the House and the Senate have been horse-trading over the amount of spending, versus the amount of taxes, necessary to pay for President Biden’s $2.3 trillion budget plan. Republicans are already on record that they will oppose any new tax hikes at all. Since the Democrats hold such a slim majority in both the House and…
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Disappointing job gains in leisure and hospitality sectors
The most recent jobs report was disappointing. Only 235,000 jobs were created in August 2021, versus an expectation of 720,000. Leisure and hospitality jobs had led the way this year — until August. For the six months before August 2021, those industries had averaged 350,000 new jobs per month. Last month there were no job gains in the sectors. The drop-off in leisure and hospitality resulted in August’s jobs gains being the weakest monthly gain since January 2021. The weakness was attributed to rising COVID-19 cases. Consumer demand ticked down as the uncertainty regarding new infections went up. U.S. infection…
Some brokers are getting bearish
For four days in a row, the markets closed down. That is in itself unusual. It has only happened four other times since the March 2020 low. Does this portend further downside in September 2021? On Friday, the markets bounced back. The damage to the averages has been minimal thus far. But given how far we have come, more and more brokerage houses (Goldman Sachs, Deutsche Bank, and Morgan Stanley, among others) are warning that the September-through-October 2021 time frame could see a 10% correction. How much weight should you give these gloomy predictions? If you are a short-term day,…