The Trump Effect on US Economy is Powerful
$DIA, $SPY, $QQQ, $VXX
Since Trump’s recent tax-reform bill repealed the Obama penalties of the “Individual Mandate,” there is disposable income for working families to use toward investing, not just spending.
The Trump Tax Plan will also create more cash to invest for W-2 workers each payday. Plus, the new tax brackets may create record tax refunds this quarter for those who paid in all of Y 2017.
The 20% QBI Qualified Business Income deduction and new higher health care costs deductions may also put more cash on Main Street.
We have already seen the corporate tax break “Trump Bump,” but nobody is sure how big the ongoing market stimulus will be from the working families of the USA.
Notably, now W-2 and non W-2 workers are incentivized to invest into IRAs, 401(k)s, and self-directed plans before tax time as many taxpayers receive a higher tax refund based on their deduction from funding their retirement plans before 15 April.
With more people employed, the better the probability of index related stock market strength created by mass inflows of cash to retirement related accounts.
As for jobs and the economy, apply the U-6 Stock Market Liquidity Theorem with the added bonus of market boosting lower taxes. So, a lower U-6, creates higher inflows of cash invested in securities and potentially lowers the probability of downside in the domestic stock markets.
Tuesday, the major US stock market indexes finished at: DJIA +213.59 at 24786.63, NAS Comp +124.81 at 7281.09, S&P 500+28.55 at 2706.39
Volume: Trade on the NYSE came in at 720-M/shares exchanged
- NAS Comp +5.5% YTD
- Russell 2000 +2.9% YTD
- S&P 500 +1.2% YTD
- DJIA +0.3% YTD
HeffX-LTN’s Market Indexes Technical Analysis