• Skip to primary navigation
  • Skip to main content
  • Skip to primary sidebar

PRESSLED

Your Leading News Source

PRESSLED
Your Leading News Source

  • Home
  • BUSINESS
  • MONEY
  • POLITICS
  • REAL ESTATE
  • US
  • Meet the Reporters
  • About/Contact

Here’s the catalyst that could shift the market debate from selling the news to buying the dip

May 28, 2021 by Staff Reporter

Two things are clear this earnings season.

The first is that first-quarter earnings have been outstanding. According to a Credit Suisse analysis done of 85% of the S&P 500’s companies, 86% beat expectations — with the financial sector clobbering them by 34%, and the rest of the market beating them by 19%. Earnings per share are projected to grow 47% on 10% revenue growth.

The second is that investors aren’t impressed. A Bank of America analysis done on Monday, so missing this last week of results, found companies that beat on both sales and EPS have outperformed the S&P 500 by just 16 basis points the next day, well below the historical average of 151 basis points.

Louis Navellier, the founder and chief investment officer of Navellier & Associates, said the Biden administration’s proposal to hike corporate taxes is what is hanging over the market.

“Within the debate over the market’s near-term outlook, the Goldilocks catalyst will be influenced by how future corporate taxes are structured. It is likely that after all the super PACs [political action committees] weigh in, the new corporate income-tax rate will likely be around 25%,” he said. “I’m looking for the narrative to quickly shift from ‘selling the news’ to ‘buying the dip’ as the tax debate takes on more clarity,” he writes.

The S&P 500
SPX,
+0.28%
could reach 4,600 by the end of the year, as Credit Suisse is targeting, if corporate taxes are negotiated to a lower level, said Navellier.

That view has some support from what President Joe Biden himself said. Speaking in Louisiana on Thursday to promote his infrastructure bill, Biden out loud suggested 25% as a number he would accept.

He prefaced his comment by noting the Obama administration had suggested cutting corporate tax rates that were then 35% — but not to 21%, where Congress set them under the Trump administration. Biden said it was important that the largest companies don’t pay zero, and added, “And — and reducing the — the tax cut to between 25 and 28, it’s a couple hundred billion dollars. We can pay for these things,” said Biden, according to a transcript released by the White House.

Biden’s current plan calls for the corporate tax rate to be increased to 28% from 21%.

Payrolls miss expectations by a mile

The Labor Department reported a shockingly lower-than-expected 266,000 rise in nonfarm payrolls in April. While in normal times that would be a good reading, it compared to expectations of around 1 million.

Another surprise came in that the unemployment rate rose, to 6.1% from 6%.

The knee-jerk reaction was a gains in stocks, on the view the Federal Reserve would not be in a hurry to slow down bond purchases. U.S. stock futures
ES00,
+0.24%

NQ00,
+0.40%
advanced as the yield on the 10-year Treasury
TMUBMUSD10Y,
1.595%
plunged to 1.49%.

The Federal Reserve’s financial stability report warned that asset prices may be vulnerable to significant declines — a similar warning to one the central bank made in November.

An optimistic financial outlook lifted Peloton Interactive
PTON,
-1.79%
in premarket trade, which said a recall of its treadmill would cost the company about $165 million in revenue in its fiscal fourth quarter. Cybersecurity firm Cloudflare
NET,
+0.08%
reported stronger-than-forecast revenue. Roku
ROKU,
+0.51%,
the streaming hardware provider, issued a revenue outlook above current estimates.

Teladoc Health
TDOC,
+1.62%
may see pressure, after retailing giant Walmart
WMT,
+0.36%
agreed to buy MeMD, a telehealth provider.

Citi
C,
+0.15%
is considering launching crypto services, the Financial Times reported.

Random reads

Keep your head up — a Chinese rocket is due to fall back to Earth this weekend.

Not for the first time, goats are being called upon to protect the Ronald Reagan Presidential Library and Museum.

Need to Know starts early and is updated until the opening bell, but sign up here to get it delivered once to your email box. The emailed version will be sent out at about 7:30 a.m. Eastern.

Want more for the day ahead? Sign up for The Barron’s Daily, a morning briefing for investors, including exclusive commentary from Barron’s and MarketWatch writers.

>>>ad: Don't Miss TODAY'S BEST Amazon Deals!

Originally Appeared Here

Filed Under: BUSINESS, MONEY, POLITICS, US

Primary Sidebar

More to See

Former Georgia Tech Kicker Harrison Butker Sends Kansas City To The Super Bowl

Harrison Butker is going to be playing for another Super Bowl with the Kansas City Chiefs.Butker nailed the game-winning field goal to send the Chiefs … [Read More...] about Former Georgia Tech Kicker Harrison Butker Sends Kansas City To The Super Bowl

Stock Market Opening News Today

Sensex, Nifty Open: आज अडानी ग्रुप शेयरों में बिकवाली जारी है. वहीं बैंक और फाइनेंशियल सेक्‍टर के हैवीवेट शेयरों ने भी बाजार को कमजोर किया है. Sensex, … [Read More...] about Stock Market Opening News Today

Henry Bott Now President of Swire Properties US

One of Hong Kong’s best known conglomerates leads this week’s set of personnel updates on Mingtiandi as Hong Kong’s John Swire and Sons announces new … [Read More...] about Henry Bott Now President of Swire Properties US

Privacy Policy | Terms and Conditions | About/ Contact
Copyright © 2023 · PRESSLED · As Amazon Associates we earn commissions from qualifying purchases · Log in

We use cookies on our website to give you the most relevant experience by remembering your preferences and repeat visits. By clicking “Accept All”, you consent to the use of ALL the cookies. However, you may visit "Cookie Settings" to provide a controlled consent.
Cookie SettingsAccept All
Manage consent

Privacy Overview

This website uses cookies to improve your experience while you navigate through the website. Out of these, the cookies that are categorized as necessary are stored on your browser as they are essential for the working of basic functionalities of the website. We also use third-party cookies that help us analyze and understand how you use this website. These cookies will be stored in your browser only with your consent. You also have the option to opt-out of these cookies. But opting out of some of these cookies may affect your browsing experience.
Necessary
Always Enabled
Necessary cookies are absolutely essential for the website to function properly. These cookies ensure basic functionalities and security features of the website, anonymously.
CookieDurationDescription
cookielawinfo-checkbox-analytics11 monthsThis cookie is set by GDPR Cookie Consent plugin. The cookie is used to store the user consent for the cookies in the category "Analytics".
cookielawinfo-checkbox-functional11 monthsThe cookie is set by GDPR cookie consent to record the user consent for the cookies in the category "Functional".
cookielawinfo-checkbox-necessary11 monthsThis cookie is set by GDPR Cookie Consent plugin. The cookies is used to store the user consent for the cookies in the category "Necessary".
cookielawinfo-checkbox-others11 monthsThis cookie is set by GDPR Cookie Consent plugin. The cookie is used to store the user consent for the cookies in the category "Other.
cookielawinfo-checkbox-performance11 monthsThis cookie is set by GDPR Cookie Consent plugin. The cookie is used to store the user consent for the cookies in the category "Performance".
viewed_cookie_policy11 monthsThe cookie is set by the GDPR Cookie Consent plugin and is used to store whether or not user has consented to the use of cookies. It does not store any personal data.
Functional
Functional cookies help to perform certain functionalities like sharing the content of the website on social media platforms, collect feedbacks, and other third-party features.
Performance
Performance cookies are used to understand and analyze the key performance indexes of the website which helps in delivering a better user experience for the visitors.
Analytics
Analytical cookies are used to understand how visitors interact with the website. These cookies help provide information on metrics the number of visitors, bounce rate, traffic source, etc.
Advertisement
Advertisement cookies are used to provide visitors with relevant ads and marketing campaigns. These cookies track visitors across websites and collect information to provide customized ads.
Others
Other uncategorized cookies are those that are being analyzed and have not been classified into a category as yet.
SAVE & ACCEPT