Trump’s Tax Cut a ‘Huge Tailwind’ for Businesses, Rally Resumes

Trump’s Tax Cut a ‘Huge Tailwind’ for Businesses, Rally Resumes

Trump’s Tax Cut a ‘Huge Tailwind’ for Businesses, Rally Resumes


Industry Watch

Strong: Financials, Industrials, Technology, Telecom Services
Weak: Consumer Discretionary, Energy, Materials, Consumer Staples, Utilities, Real Estate


Former Hillary Clinton supporter Warren Buffett lauded Republicans’ corporate tax reform as a “huge tailwind for businesses,” and the Berkshire Hathaway (NYSE:BRK.A&B) Boss should know, his company went up $34-B in net worth because of deferred tax liability.

Monday, on TV Mr. Buffett extolled the benefits of a corporate tax rate that dropped from 35 to 21%, thanks to congressional Republicans and President Donald Trump.

“So $14-B, roughly, was a reduction in the amount of tax that when we sell those securities we will pay. It wasn’t cash now. But it reduced a liability. When you reduce a liability, net worth goes up.”

Saturday, Berkshire reported a record quarterly and annual profit, and its net worth increased last year to $65.3%, with almost 50% of that coming from the change in tax law.

“It’s a huge tailwind and it’s particularly a tailwind” for companies, like his, that benefit from bonus depreciation up front on things like railroad cars, in Berkshire’s case.

“It’s a big item. Not as many companies have lots of appreciation in marketable securities, but it’s a big item for those that do,” Mr. Buffett said.

Monday, the major US stock market indexes finished at: DJIA +399.28 at 25709.27, NAS Comp +84.07 at 7421.46, S&P 500 +32.30 at 2779.60

Volume: Trade on the NYSE came in at: 813-M/shares exchanged

  • NAS Comp +7.5% YTD
  • S&P 500: +4.0% YTD
  • DJIA +4.0% YTD
  • Russell 2000: +1.6% YTD

HeffX-LTN’s Market Indexes Technical Analysis

Date Symbol Price Technical Analysis Support Resistance
26 February 2018 QQQ 169.55 Bullish (0.30) 169.04 170.93
26 February 2018 DIA 255.77 Neutral (0.19) 255.37 265.91
26 February 2018 SPY 276.69 Neutral (0.20) 275.25 280.46


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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