HI Market View Commentary 03-11-2019

What I want to talk about today?

What caused our market to be overly bearish? HEADLINE RISK

WHY is the VIX down to low in general? Complacency

Where will our markets be in 2020 or 2021? Sometime, somewhere in the future our stock market correction will have to include the stimulus, the tax breaks, the QE, the Fed huge balance sheet, the band aids placed into law….SO

I want to be able to collar trade, Pick up or double my share count and create monthly income through the strangle straddle.  

The next stock market crash you don’t have to be fearful – 6 years overdue

Where will our markets end this week?

Higher

DJIA – Bearish

SPX – Bearish

COMP – Bearish

Where Will the SPX end March 2019?

03-11-2019            0.0%

03-04-2019            0.0%

02-25-2019             0.0%

Earnings:   

Mon:            ADT,

Tues:            DKS

Wed:            EXPR, TACO

Thur:           DG, GCO, ADBE, DOCU, JBL, TLYS

Fri:              BKE, KIRK

Econ Reports:

Mon:            Business Inventories, Retail Sales, Retail ex-trans

Tues:            Treasury Budget, CPI, Core CPI, NFIB Small Business Optimism

Wed:            MBA,  PPI, Core PPI, Durable Goods, Durable ex-trans, Construction Spending  

Thur:           Initial, Continuing, Import, Export, New Home Sales

Fri:               Empire, Capacity Utilization, Industrial Production, Michigan Sentiment, Net Long Term Tick Flows

Int’l:

Mon –

Tues –         

Wed –         

Thursday –  

Friday-       

Sunday –       

How am I looking to trade?

Short term stock only positions

Short term spread trades

Get through monthly options expiration on this Friday

And add May options the end of March for Tax/Earning protection

RHT – 3/26

www.hurleyinvestments.com 

www.myhurleyinvestment.com = Blogsite

customerservice@hurleyinvestments.com = Email

Questions???

https://www.bloomberg.com/graphics/2019-candidate-tax-proposals/

How Democrats Want to Tax the Rich

By Marie Patino and Laura Davison

Published: March 4, 2019 | Updated: March 5, 2019

Democrats are leading the 2020 presidential campaign with a slew of tax-the-rich proposals, representing a tone change revealing a party moving to the left.

The plans emerge as a bevy of Democratic contenders are trying to catch fire in a party that is unified in its hopes of defeating Trump next year. They are looking to ride a wave that reclaimed the House of Representatives for the party last November, and swept many unabashed progressives into office.

The ideas—ranging from annual millionaire taxes to levies on Wall Street trades—are the source of much-needed revenue to fund big-picture progressive ideas, including Medicare for all and free college tuition. The candidates’ ideas of who should be taxed and how much they should pay are slated to be a key differentiator as they vie for their party’s nomination.

2020 Presidential Candidates

Tax proposals from the 2020 Democratic hopefuls. Click to scroll to proposal details.?

Candidates with proposals All candidates

Income Tax

Corporate Tax

Tax on Assets

Financial Trades Tax

Kirsten Gillibrand

—

—

—

Levy a 0.5% tax on stock trades and a 0.1% tax on bond trades

Kamala Harris

Tax credits paid through rolling back some tax cuts

—

—

—

Bernie Sanders

—

—

Tax on estates that have a value above $3.5 million

Levy a 0.5% tax on stock trades and a 0.1% tax on bond trades

Elizabeth Warren

—

—

Tax households with a wealth above $50 million

—

Other Prominent Democrats

They are not running in the 2020 election, but their recommendations might influence the candidates. Click to scroll to proposal details.?

Income Tax

Corporate Tax

Tax on Assets

Financial Trades Tax

Alexandria Ocasio-Cortez

Tax at 70% on income over $10 million

—

—

—

Ilhan Omar

Make maximum marginal tax rate 90%

—

—

—

Brian Schatz

—

—

—

Levy a 0.1% tax on financial trades

Kirsten Gillibrand

Democratic Senator from New York

PROPOSAL
Levy a 0.5 percent tax on stock trades, and a 0.1 percent tax on bond trades.

WHAT’S IN PLACE NOW
Nothing comparable.

ANALYSIS
Gillibrand has signed on as a co-sponsor of Bernie Sanders’s bill, which proposes to tax stock trades at 0.5 percent, and bond trades at 0.1 percent.

SUPPORT
Among likely voters, 42 percent would support a financial transaction tax, according to a survey conducted between April and May 2018.

• ·        Disapprove

• ·        Don’t know

• ·        Approve

36%

22%

42%

Source: Lake Research Partner

Kamala Harris

Democratic Senator from California

PROPOSAL
Provide tax credits and direct payments to middle-income and low-income families by rolling back tax breaks for those making more than $100,000. Tax banks with more than $50 million in assets.

WHAT’S IN PLACE NOW
Low-income workers can claim the earned-income tax credit. The amount of the credit depends on how much one earns and how many children they have. The maximum income level to be eligible for the credit is about $55,000 for those who are married with three or more children.

ANALYSIS
The plan would cut taxes for middle earners, something Democrats have said Republicans didn’t do enough of in their 2017 overhaul. However, Harris’s plan is likely to cost more than $2.5 trillion, meaning she would need additional revenue raisers to fully pay for it.

Bernie Sanders

Independent Senator from Vermont

PROPOSAL
Set a 45 percent tax on the value of estates between $3.5 million and $10 million, increasing gradually to 77 percent for amounts more than $1 billion. Levy a 0.5 percent tax on stock trades, and a 0.1 percent tax on bond trades.

WHAT’S IN PLACE NOW
Current estate tax kicks in when an estate is worth about $11 million.

ANALYSIS
Sanders’s expanded estate tax would tax more of an estate as it is handed down to the next generation. It has been successfully branded as the “death tax” by its opponents. The tax on financial products he has proposed would increase the cost of trades, and would likely curb high-frequency trading which critics say has contributed to market volatility.

SUPPORT
Half the country supports the estate tax proposal, according to a poll conducted in February 2019.

• ·        Disapprove

• ·        Don’t know

• ·        Approve

29%

21%

50%

Source: Morning Consult/Politico

REVENUE

$2.2 trillion

over the next decade

Elizabeth Warren

Democratic Senator from Massachusetts

PROPOSAL
Levy a 2 percent tax on households with wealth above $50 million, and a 3 percent tax for those with wealth above $1 billion.

WHAT’S IN PLACE NOW
Nothing comparable.

ANALYSIS
Supporters say the tax would curb inequality. Critics say valuing private assets would create an administrative nightmare for the IRS.

SUPPORT
More than 60 percent of Americans would favor a wealth tax, according to a survey conducted in February 2019.

• ·        Disapprove

• ·        Don’t know

• ·        Approve

20%

19%

61%

Source: Morning Consult/Politico

REVENUE

$2.75 trillion

over the next decade

Alexandria Ocasio-Cortez

Democratic Representative for New York 14th District

PROPOSAL
Income over $10 million would be taxed at 70 percent.

WHAT’S IN PLACE NOW
The current top rate is 37 percent on income above $500,000.

ANALYSIS
The tax would increase the top tax brackets to a level not seen since the 1970s. It would do less to slow income inequality, as most top-earners get their income in the form of lower-taxed capital gains rather than wages.

SUPPORT
Forty-five percent of Americans would support such a measure, according to a survey conducted in February 2019.

• ·        Disapprove

• ·        Don’t know

• ·        Approve

32%

23%

45%

Source: Morning Consult/Politico

REVENUE

$353 billion

over the next decade

Ilhan Omar

Democratic Representative for Minnesota 5th District

PROPOSAL
The maximum marginal tax rate would be set at 90 percent.

WHAT’S IN PLACE NOW
The current rate is 37 percent on income above $500,000.

ANALYSIS
The tax would go beyond many other proposals to increase levies on top earners. Opponents say taxes that approach 100 percent discourage people from expanding their businesses or innovating beyond a certain point. There are currently no estimates of how much money this tax would raise.

Brian Schatz

Democratic Senator from Hawaii

PROPOSAL
The financial trading tax would levy a 0.1 percent tax on trades of stocks, bonds and derivatives.

WHAT’S IN PLACE NOW
Nothing comparable.

ANALYSIS
The tax would limit the amount of high-frequency trading, but critics say it could decrease liquidity in financial markets.

SUPPORT
Among likely voters, 42 percent would support a financial transaction tax, according to a survey conducted between April and May 2018.

• ·        Disapprove

• ·        Don’t know

• ·        Approve

36%

22%

42%

Source: Lake Research Partner

REVENUE

$777 billion

over the next decade

What Americans think of taxes

Since 2016, Americans’ views on taxes have evolved. Where 16 percent of them used to think that corporate taxes were fair, 24 percent now think so.

In addition, Americans’ perception of their own income tax has changed over the last two years: 45 percent now think they are paying too much in taxes, against 57 percent in 2016.

Americans’ Views on Taxes

• ·        Too much

• ·        Fair

• ·        Not enough

What do you think of upper-incomepeople’s tax?2016201862%1026611521What do you think of corporatetaxes?2016201866%724671216What do you think of your incometax?2016201834548%35737

Source: Gallup polls Editor: Mira Rojanasakul

Sources: Revenue estimates are from the candidates. For Alexandria Ocasio-Cortez, the estimate comes from Wharton School at the University of Pennsylvania. For Brian Schatz, the estimate comes from the Congressional Budget Office. Rest of the data compiled by Bloomberg.

https://www.barrons.com/articles/stock-market-rally-small-transports-51552325423?mod=hp_DAY_3

Can the Stock Market Keep Rallying? These Two Indexes Say It Can

By 

Ben Levisohn

March 11, 2019 1:31 p.m. ET

Text size

1:16 p.m. The stock market is rallying back on Monday from its worst loss of 2019. But is the bounce for real?

Consider: Last week, the S&P 500 dropped 2.2%, while the Dow Jones Industrial Average fell 2.2%, and the Nasdaq Composite decline 2.5%. It was the worst week of the year, as investors fretted about weakness in the global economy.

The decline had many expecting more downside if only because the market’s gains in 2019 looked unsustainable—the S&P 500 is up 11% this year even after last week’s drops. And there are those that won’t be comfortable until the S&P 500 finally breaks through resistance between 2,800 and 2817.

So how will we know if the rally is real? In a note this morning, Nomura Instinet’s Frank Cappelleri recommended watching the small-cap Russell 2000 and the Dow Jones Transportation Average, which have dropped 4.3% and 3.3% last week, significantly underperforming the S&P 500. “If dip buying is indeed still with us, these areas should bounce,” Cappelleri writes. “If they don’t, this downturn may have further to go.”

How that working? Quite well, actually. While the S&P 500 has gained 1.3% to 2777.37 today, the Russell 2000 has climbed 1.5% to 1,544.35. and the Dow Jones Transportation Average has risen 1.7% to 10,287.41. In response to an email earlier today, Cappelleri called it a “good start,” but wants to see the market’s strength persist through the close.

So far so good.

Markets Now is a quick take on what’s happening with the Dow Jones Industrial Average and other major market indexes. Don’t forget to check out the rest of Barron’s markets coverage.

Write to Ben Levisohn at Ben.Levisohn@barrons.com