Global stocks retreat after Trump tax plan

Traders work on the floor of the New York Stock Exchange (NYSE) in New York, U.S., April 24, 2017.

http://www.reuters.com/article/us-global-markets-idUSKBN17S035

Equities retreated from highs on Wednesday after a U.S. tax plan disappointed, while the Canadian dollar and Mexican peso weakened against the greenback on the possibility of a U.S. withdrawal from the North American Free Trade Agreement.

Wall Street gave up gains after U.S. President Donald Trump proposed slashing tax rates for businesses and on overseas corporate profits returned to the country in a long-awaited plan greeted as an opening maneuver by his fellow Republicans in Congress.

The plan would cut the income tax rate paid by public corporations to 15 percent from 35 and reduce the top tax rate assessed on pass-through businesses, including small partnerships and sole proprietorships, to 15 percent from 39.6.

“The key question really is what is doable from a budgetary and political perspective in Congress and this is going to be a bit of an uphill fight to get this plan enacted into law,” said David Lefkowitz, senior equity strategist at UBS Wealth Management Americas in New York.

“At the end of the day, earnings for any particular company are going to be the biggest driver.”

Thermo Fisher Electron, up 5.8 percent, was the top boost to the benchmark S&P index while Dow component United Technologies gained 1.1 percent after results.

The U.S. dollar retreated from highs against major rivals in the wake of the tax plan but strengthened against both the Mexican peso and Canadian dollar after a senior Trump administration official said a draft executive order to withdraw the United States from the North American Free Trade Agreement is under consideration.

The Dow Jones Industrial Average .DJI fell 21.03 points, or 0.1 percent, to end at 20,975.09, the S&P 500 .SPX lost 1.16 points, or 0.05 percent, to 2,387.45 and the Nasdaq Composite .IXIC dropped 0.27 point to 6,025.23.

The Mexican peso MXN= weakened 1.85 percent versus the U.S. dollar at 19.20 pesos while the Canadian dollar CAD=D4 weakened 0.31 percent versus the greenback at 1.36 per U.S. dollar.

The main Mexican and Canadian share indexes .GSPTSE .MXX both fell more than half a percent.

European shares are at 20-month highs after a three-day rally sparked by centrist Emmanuel Macron’s win in the first round of French presidential elections, which considerably lessened the risk of a French exit from the euro zone. Higher-than-expected earnings have also supported gains.

http://www.smh.com.au/world/donald-trumps-team-unveils-opening-bid-for-biggest-tax-cut-in-us-history-20170426-gvtaq9.html

The central feature of the White House’s plan would be a big reduction in tax rates for virtually all Americans and businesses.

It would eliminate the seven existing income tax brackets and replace them with three brackets, containing new rates of 10 per cent, 25 per cent, and 35 per cent, based on someone’s income. White House officials haven’t specified which income levels would hit the higher tax brackets, as they see that as part of ongoing discussions with Capitol Hill.

It would also roughly double the standard deduction that Americans can use to reduce their taxable income. The deduction for married couples would move from $US12,600 to $US24,000. This would incentivise people not to itemise their tax returns and instead use the standard deduction, simplifying the process and potentially saving taxpayers thousands of dollars each year.

The White House plan would eliminate the alternative-minimum tax and the estate tax, provisions that raise billions of dollars each year but have long been the target of Republicans seeking to rip up the tax code. Mr Cohn, speaking of the AMT, said “we don’t think that people should have to do their taxes twice,” and added that the estate tax unfairly prevented farmers and others from passing along their businesses to the next generation.

In order to offset some of the cost of the lower rates, Trump administration officials said they were proposing to eliminate virtually all tax deductions that Americans claim, provisions that they argued primarily benefited wealthier Americans. Mr Cohn said they would preserve tax breaks that incentivise home ownership, retirement savings, and charitable giving. But almost all others would be jettisoned.

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i think interest rates are about to move up globally..do you feel it?

401

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~ by seeker401 on April 29, 2017.

3 Responses to “Global stocks retreat after Trump tax plan”

  1. https://pbs.twimg.com/media/C-lnyDmXUAA-u7H.jpg:large

  2. Reblogged this on World Peace Forum.

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