President Trump’s Tax Cuts Promote Growth, Reduce Deficit

President Trump’s Tax Cuts Promote Growth, Reduce Deficit

President Trump’s Tax Cuts Promote Growth, Reduce Deficit

$DIA, $SPY, $QQQ, $VXX

Market Notes

  • Stocks rose to new all-time highs with technology and energy shares pacing the advance as The Trump Rally extends
  • The CBOE launched Bitcoin (BTCUSD)futures trading Sunday evening. The 1-month futures contract was trading at around $18,600 at the stock market’s closing bell.
 The tax cuts proposed in the GOP Senate tax bill would pay for themselves over 10 years in combination with President Donald Trump’s other economic policies, according to an analysis released by the US Treasury Department Monday.

The Treasury’s tax report says that the combined impact of Trump’s economic agenda will drive enough growth to pay for the tax cuts.

Treasury’s Office of Tax Policy based its growth estimates on the 2018 White House budget, which contained some different tax provisions from those in the legislation Congress is considering.

The new analysis found that GDP (gross domestic product) would increase to an average of 2.9% over 10 years, which would lead to $1.8-T in new revenue, more than offsetting the tax plan’s almost $1.5-T cost.

Roughly 50% of the boost in growth would come from corporate tax cuts, while the other 50% would come from changes to pass-throughs, individual tax cuts and “a combination of regulatory reform, infrastructure development, and welfare reform as proposed” in The Trump Administration’s 2018 budget.

The bill’s backers, including Secretary Mnuchin argue the tax plan would pay for itself through robust economic growth resulting from the cuts

“We believe there will be $2-T of additional growth,” Sec. Mnuchin said. “So under our plan, we believe this will cut the deficit by $1-T and that’s what we’re focused on.”

Sec. Mnuchin last month released a letter signed by 9 economists, many from past Republican administrations, saying the tax plan will lead to “substantial growth.”

Monday, the US major stock market indexes finished at: DJIA +56.87 at 24386.03, NAS Comp +35.00 at 6875.08, S&P 500 +8.49 at 2659.99

Volume: Trade on the NYSE came in at: 783-M/shares exchanged

  • NAS Comp +27.7% YTD
  • DJIA +23.4% YTD
  • S&P 500 +18.8% YTD
  • Russell 2000 +12.0% YTD
HeffX-LTN Analysis for DIA: Overall Short Intermediate Long
Very Bullish (0.58) Bullish (0.28) Very Bullish (0.88) Very Bullish (0.58)
HeffX-LTN Analysis SPY: Overall Short Intermediate Long
Very Bullish (0.53) Bullish (0.40) Very Bullish (0.62) Very Bullish (0.58)
HeffX-LTN Analysis for QQQ: Overall Short Intermediate Long
Very Bullish (0.57) Bullish (0.28) Very Bullish (0.77) Very Bullish (0.67)
HeffX-LTN Analysis for VXX: Overall Short Intermediate Long
Bearish (-0.41) Bearish (-0.47) Bearish (-0.46) Bearish (-0.29)

Stay tuned…

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Paul Ebeling

Paul A. Ebeling, polymath, excels in diverse fields of knowledge. Pattern Recognition Analyst in Equities, Commodities and Foreign Exchange and author of “The Red Roadmaster’s Technical Report” on the US Major Market Indices™, a highly regarded, weekly financial market letter, he is also a philosopher, issuing insights on a wide range of subjects to a following of over 250,000 cohorts. An international audience of opinion makers, business leaders, and global organizations recognizes Ebeling as an expert.

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