Dow Jones Futures Rise As Biden Touts Agenda, Tax Hikes; Apple, Facebook, Qualcomm Flash Buy Signals

  • 3 years ago
Dow Jones futures rose early Thursday, along with S&P 500 futures and especially Nasdaq futures, with Apple stock, Facebook, ServiceNow, and Qualcomm headlining notable earnings movers. President Joe Biden touted his tax hike proposals and latest spending plans in a primetime address before Congress.
The stock market rally edged lower Wednesday, awaiting Apple earnings and Biden tax hike details. Investors also digested the latest Fed meeting announcement and Fed chief Jerome Powell's comments as well as overnight results from Microsoft stock, Google parent Alphabet (GOOGL) and many others. Google stock jumped to a new high while Microsoft retreated modestly. Tesla (TSLA) stock fell slightly, testing its 50-day line after Tuesday's post-earnings sell-off.
Biden favors raising the top income tax rate to 39.6%, from 37% currently. He also proposed nearly doubling the top capital gains tax rate to 39.6% from 20% to help pay for his third massive spending bill. Including an ObamaCare surcharge, the top rate would be 43.4%. In many states, including California and New York, the federal-and-state cap gains rate would top 50%. The higher capital gains tax rate would only apply to those making at least $1 million a year.
Another concern is whether the massive fiscal stimulus, combined with an all-out Federal Reserve, will generate inflation as the U.S. economy already benefits from a pandemic recovery. That, along with Biden tax hikes, could be a one-two punch for the stock market.
President Biden doesn't seem too concerned about the impact on stock prices. In excerpts from his speech, Biden plans to tell Congress that "Wall Street didn't build this country," middle America did.
Many analysts believe that the Biden tax hike proposals ultimately will be watered down to clear the 50-50 Senate. But Wall Street didn't expect the Biden stimulus package to end up being so large.

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