Morning Commentary
Yes, I got the license plate number of that truck that hit the market: J.E.N.P.S.K.A.I.
Stocks opened mixed yesterday with cyclical names, particularly banks, powering the Dow Jones Industrial Average higher, and growth names dragged the NASDAQ Composite lower. The S&P was down, but nothing to panic about, as four sectors were solidly higher.
The real carnage, however, came around 1:50 pm, when Jen Psaki, White House Press Secretary, indirectly confirmed the White House is planning on increasing the tax rate on individuals making less than $400,000, breaking a key campaign pledge. Psaki tried to play it off, saying it would only impact 2% of taxpayers, but the market was flattened, as there was a race for the exits. Major equity indices were slammed and closed at the low of the session.
Apolitical Frustration
I do not care what your politics are. The fact is President Biden pledged no one making less than $400,000 a year would see their taxes hiked. I am beside myself over this because the net is going to snare so many small businesses and upper middle-class folks that just arrived after years of toil and hard work.
Folks who make less than $400,000 are NOT millionaires. It is an affront to the promise of the freedom to pursue the American Dream.
During the election, there was a rumor of a major tax hike being made retroactive, but everyone blew that off as nonsense. And yet, after the bait and switch move, the administration will have to be viewed through a lens of skepticism about taxes.
What’s really nuts is to promote a rescue package using the urgency of the moment, then assume the coast is clear for a massive tax hike that would slow the economy. If President Biden were a comedian, I would say ‘you’re stepping on your lines.’
But then again, there is nothing to laugh about no matter how the news is delivered. The campaign promise was simply not true. I’m told the tax on households was in some of the campaign literature. It sounds like the excuse Robinhood used to slam investors when they were not allowed to purchase GameStop (GME) and other stocks.
I hope the White House reconsiders their ambitious tax plans in general and certainly holds the line at $400,000 per individual – as promised a million times.
Market Breadth
It was ugly. The only good news is the volume was light for a session under so much pressure.
Market Breadth |
NYSE |
NASDAQ |
Advancing |
684 |
914 |
Declining |
2,631 |
3,207 |
52 Week High |
336 |
270 |
52 Week Low |
33 |
74 |
Up Volume |
1.30B |
1.20B |
Down Volume |
3.39B |
4.19B |
Crude Awakening
It wasn’t just stocks. Crude oil was leaking for several days, and the bottom fell out yesterday. It was a combination of an inventory build, slower than anticipated global recovery, and being overbought.
Also, in this environment, when hot assets turn cold – they turn cold as a stone - and can drop like a rock.
West Texas Intermediate (WTI)
Portfolio Approach
We made no change to the Hotline Model Portfolio.
Money Continues to Pour into the Stock Market, and this money has to go to work. Keep that in mind.
Today’s Session
Futures were relatively flat but now the markets are under pressure again after yesterday’s drubbing. The 10-year Treasury is up this morning to 1.74%. The Fed is going to let temporary change to the supplementary leverage ratio (SLR), which it issued on March 15, 2020, expire as planned on March 31.
Oil is continuing is retreat, down slightly to $59.91 but off its worse levels.
Comments |
Its getting rough out there in the market. My stocks are so red it looks like it is bleeding. Dang, makes you want to sell out and sit in a cave. Daniel Scott Fife on 3/19/2021 9:52:12 AM |
Your best advice was yesterday....Don't panic...breathe....buy the dip! Stephen Ross on 3/19/2021 10:20:00 AM |
You think this is bad just wait. We received our monthly newsletter from our elder attorney. He has asked his client to write to their representatives concerning the elimination of the step-up in basis. I wonder what that will do to the markets. Typical democratic administration. Tax and spend. Remember we are not allowed to make money. Here we go again. Distribution of wealth. Stephen Strauch on 3/19/2021 10:26:04 AM |
How could anyone have ever believed taxes for those making under $400,000 would not be increased? You had to believe the math, the “promise” never added up to the spending that was coming. And indirectly everyone will pay more with higher costs for goods and services at a disproportionate rate to those in the higher income brackets. Mike R on 3/19/2021 10:30:38 AM |
My taxes were already up. And that was under the Trump 'tax cut'. I'm not a happy camper after filing last year's taxes. Brian Bigelow on 3/19/2021 11:03:08 AM |
Joe lied...so what else is new. I agree with Mr. Fife's comment - a cave looks pretty good right now. Bill Frohberg on 3/19/2021 11:12:54 AM |
No one is 100% right but in my view no one should be surprised at the volitility or take short term view of oil stocks right now. We will fully reopen in the next 3 to 6 months and the energy sector will see significant upside as a result. So, IMO don't sweat the recent daily moves down, it's just noise... James on 3/19/2021 12:54:53 PM |
Charles, I'm ahead of you in this walk of life by a few (just a few) years. So having a new president backtrack on campaign promises is an echo of past presidents, ie President HW Bush - "Read my lips, No New Taxes" (well, except for a few new ones). Then there was President Clinton's compelling "Retro Active income tax increase" of 1993, all to achieve a balanced budget (???). Still waiting to see that. Thus, fooling us into paying more taxes is not a failed campaign promise, it is a given, a Revealed Truth. Elections are not won by promising "To Raise Taxes". But, once elected.... off they go - hitting us with higher taxes. In my memory, President Reagan and President Trump have been the only presidents that actually cut taxes.... I'm sure you may have better info on that. Thanks for all you do to speak candidly and from the heart. Rebecca L Freitas on 3/19/2021 1:20:16 PM |
Rebecca I remember "read my lips" and that's why he was a one term president -
Thanks for your kind comments. CP Charles Payne on 3/19/2021 1:23:38 PM |
This will be only the beginning of this administrations grab at personal income, assets and wealth! Democrats of today are progressive Socialist and believe Gov't should have the right to control every aspect of society and the economy. What floors me is how many well educated and well off people vote for a party that dislikes personal responsibility ad wealth accumulation! But of course those in power will always have their privilege's and positions so take for the producers and give to the non producers so they will keep us élites in power! garro on 3/21/2021 3:49:57 PM |
so perhaps its time we stop letting them run over us like roadkill. Everyone just says no surprise and moves on. Its like drugs, just say no! jj on 3/23/2021 9:28:29 PM |
Tweet |
3/28/2024 1:39 PM | Fruitful Quarter |
3/28/2024 9:50 AM | LISTEN TO THE MARKET |
3/27/2024 1:40 PM | Mostly Higher |
3/27/2024 9:32 AM | U-TURN? |
3/26/2024 1:08 PM | Everything Is Up |
3/26/2024 9:42 AM | TAPPED OUT (I HOPE YOU AT LEAST GOT A T-SHIRT) |
3/25/2024 1:33 PM | Not A Mutiny |
3/25/2024 9:35 AM | STAYING THE COURSE…BEYOND TECH |
3/22/2024 12:56 PM | Toll on Americans |
3/22/2024 9:38 AM | A TAD TIRED |
3/21/2024 1:55 PM | Building on Gains |
3/21/2024 9:30 AM | A COMFORTING FED |
3/20/2024 1:33 PM | Pivotal Moment |
3/20/2024 10:00 AM | HERE COMES THE FED |
3/19/2024 1:33 PM | Picking Up Steam |
3/19/2024 9:35 AM | RUMBLINGS IN THE BOND MARKET |
3/18/2024 1:48 PM | Mag 7 is Back |
3/18/2024 9:39 AM | THE PARTY IN SAN JOSE WILL BE LIT |
3/15/2024 1:38 PM | Realtors Settle |
3/15/2024 9:33 AM | AN UNEASY PAUSE |
3/14/2024 1:43 PM | Sticky Inflation |
3/14/2024 9:48 AM | GOING TO A GO-GO |
3/13/2024 2:16 PM | Taking a Breather |
3/13/2024 9:51 AM | ALL SO EPIC |
3/12/2024 1:42 PM | Marching Higher |
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