President Trump’s Tax Reform ‘Is a Game-Changer, a Whopper’
$DIA, $SPY, $QQQ, $VXX
Tuesday, Steve Schwarzman, the Chairman and CEO of Blackstone, said President Donald Trump’s tax-reform quest is a “game changer.”
The former adviser to President that the tax bill was “actually a game changer because there has been enormous frustration in terms of getting legislation passed.”
The bill proposes to eliminate the deductibility of interest, something Mr. Schwarzman said would be a slight negative for private equity firms, which buy companies using financing.
It also proposes that ordinary income tax be applied to investments of fewer than 3 years, a longer timeline than the 1 year threshold currently applied, something that is also not a positive for his firm, he said.
“This is a Whopper. There is no doubt about it in terms of its impact, scale and the fact that many people thought that this wouldn’t work. It seems at this point a pretty good shot that this is going to get resolved before Christmas.”
Meanwhile, investors assessed changes to the Senate’s version of a tax overhaul that could reduce gains for companies.
The Republicans made last-minute changes to their tax bill, which included retaining the corporate AMT (alternative minimum tax) after initially proposing its repeal.
That may put Senate Republicans on a collision course with Republicans in the House, whose own tax bill repealed the corporate AMT and who are already calling for the tax to be eliminated in the final legislation.
We expect the next few market sessions to behave irrationally. A lot of changes are being made to the tax bill and it obviously impacts various sectors in different ways.
Tuesday, the US major stock market indexes finished at: DJIA -109.41 at 24180.64, NAS Comp -13.15 at 6762.20, S&P 500 -9.87 at 2629.57
Volume: Trade on the NYSE came in at:887-M/shares exchanged
- NAS Comp +25.6% YTD
- DJIA +22.4% YTD
- S&P 500 +17.5% YTD
- Russell 2000 +11.8% YTD
Overall the US stock market sentiment is Bullish to Very Bullish long term.