Filling in the Gaps
The stock market trade is a no brainer, it is the tax change program, pure and simple. Country’s that have reduced corporate taxes into the 20 to 25 % rate tend to have a higher capital gains tax to offset deficit effects, rather than hitting the bottom 80 percent of the population with higher taxes and reduced education and health investments.
What is important however, is how the other four legs of the octopus act at this point, so in my view:
- Fed talk of higher rates have helped T-Bond pricess correct down into the gap created on November 15th. This should put them in place for a leg up in prices, between now and the end of the year.
- Oil has sold off from its recovery highs made over the past few days, and now must look at reality and the fact that the mid-east needs to sell some oil to pay its bills.
- Gold remains in its holding pattern, waiting for the breakout to new highs for 2017 before the end of the year.
Update at 11:45 AM CST 11/30/17
Atlanta FED GDP NOW for the 4th QTR dropped today to 2.7 % from 3.4 %, all the more reason to blowoff this stock market to the topside NOW.