Archive for November 6th, 2017

Week of Nov 3 2017 Weekly Recap & The Week Ahead

Monday, November 6th, 2017

“Of course there is always a reason for fluctuations, but the tape does not concern itself with the why or wherefore. It doesn’t go into explanations. I didn’t ask the tape why when I was fourteen, and I don’t ask it today at forty…” — Jesse Livermore

1. GOP Unveils Overhaul the Tax System
— GOP unveils the tax overhaul plan that would reduce the number of income tax brackets, raise the child tax credit and preserve popular retirement savings plans. The GOP aims to permanently lower the corporate tax rate to 20 percent. The House bill would also slash the number of income tax brackets from seven to four: 12 percent, 25 percent, 35 percent and 39.6 percent. The bill is also expected to raise the child tax credit to $1,600 from its current maximum of $1,000. It’s also expected to preserve popular retirement savings plans like 401(k)s and Individual Retirement Accounts. However, the plan would cut a popular mortgage interest deduction in half. While it would maintain the current deduction of $1 million in mortgage debt for current homeowners, that cap would be slashed to $500,000 for newly purchased homes and allow taxpayers to write off up to $10,000 in state and local property taxes.
2. ITC Proposal for 35% Duty on Imported Solar Panels — the U.S. International Trade Commission has recommended the Trump administration impose an import tariff of up to 35% on solar panels to protect U.S. manufacturers. “That’s below the price that people have been hoarding panels for,” said Cowen analyst Jeffrey Osborne. “On the demand side, job cuts won’t be as bad as feared, but on the manufacturing side, job creation won’t be as big.
3. Apple Could Drop Qualcomm Components in Future iPhones — locked in an intensifying legal dispute with Qualcomm (NASDAQ:QCOM), Apple (NASDAQ:AAPL) is designing iPhones and iPads for next year that would jettison the chipmaker’s components, sources told WSJ. Modem chips from Intel (NASDAQ:INTC) and possibly MediaTek would be placed in the devices instead as Qualcomm is reportedly withholding software critical to testing its chips in Apple prototypes.
4. Powell Set to be Trump’s Fed pick Replacing Yellen — President Trump has settled on Fed Governor Jerome Powell as next Fed Chairman, WSJ reports. If confirmed, he would take up the reins at the central bank in February. He is seen as the “safe choice” because he’s not expected to veer drastically from current Fed policy. That would mean gradually raising short-term interest rates in quarter-percentage-point steps through 2020, while slowly shrinking the Fed’s $4.2T balance sheet.
5. Venezuela Seeks to Restructure Debt — Venezuela’s Nicolas Maduro has announced plans to make one final $1.1B principal payment for a bond issued by state-owned oil company PVSDA. The country would then aim for a restructuring and refinancing, although it has few avenues to do so because of U.S. sanctions. Estimates of Venezuela’s total outstanding debt vary, with some analysts putting the figure between $100B-$150B.
6. Weekly Sentiment Survey from AAII — in this latest week’s sentiment survey from AAII, bullish sentiment increased from 39.6% up to 45.1%. That’s the first 40%+ reading in six weeks and the highest level since the first week of January.

Meanwhile, Bearish sentiment dropped nearly 4.5% percentage points to 25.57%.

The week ahead — Economic data from Econoday.com:

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