US stocks fell Thursday on news that President Biden is considering nearly doubling capital gains taxes for the rich.
Bloomberg News reported Thursday afternoon that Mr Biden would raise the capital gains tax up to 43, 4% plans, which is almost double the rate for wealthy Americans.
The S&P 500 and Dow Jones Industrial Average fell 1.2%, while the tech-intensive Nasdaq Composite fell 1.3%. The indices fluctuated between small gains and losses prior to the report.
Elsewhere, investors continued to analyze a range of earnings reports and labor market data. Many investors remain bullish on the outlook for stocks, but increasingly fear that a surge in coronavirus cases around the world could delay plans to reopen economic activity. India reported the world’s largest one-day increase in new infections on Thursday. « It wouldn’t take much new for [investors] to tear up their reopening playbook, » said Christopher Jeffery, head of inflation and interest rate strategy at Legal & General Investment management. « The market has moved from a world where it has not been questioned to a world where it has not been questioned, » he said, adding that his team is precisely tracking the surge in cases in Michigan tracked.
shares of
Equifax
rose 17% after the credit bureau late Wednesday raised its financial guidance for the year and announced it would buy back more than $ 100 million worth of shares.
Blackstone Group
Shares were up 3.6% after the private equity firm posted record earnings of $ 1.75 billion in the first quarter.
Intel
and Snap are among the companies expected to report post-market results.
Some investors are concerned about future earnings. « We just have to see what happens if you take away the incentive and cash payments, » said Kimberly Woody, senior portfolio manager at Globalt Investments. “We’re at a sugar high.” Economically, employee claims for unemployment hit another Covid-19 low of 547,000 last week. The decline is a sign that the labor market is strengthening.
Bond yields stabilized. The US 10-year Treasury yield fell to 1.563% from 1.566% on Wednesday. Yields, which are moving in the opposite direction to bond prices, have fallen from a high of 1.749% in late March.
Jason Borbora-Sheen, multi-asset portfolio manager at Ninety One, expects the broad equity market in the next Trend sideways or decline for months. « Things are pretty overbought, » he said.
One of the two funds that Mr Borbora-Sheen manages has bought put options to protect itself from downward movements in stocks. Puts are contracts that pay off when the underlying asset falls below a certain price.
In the overseas markets, stocks of technology and utility companies led the Stoxx Europe 600 by 0.7%.
The stocks of Credit Suisse Group fell 3% after the Swiss lender announced it would issue new shares after losses from Archegos Capital Management wiped out a strong first quarter. Renault shares lost 1.3% after the French automaker announced a drop in sales in the first quarter.
The European Central Bank left its policy rates and bond purchase programs unchanged, trying to put governments and businesses through a new round of coronavirus infections and – Restrictions continue to support.
In Asia, chemical and pharmaceutical stocks helped Japan’s Nikkei 225 gain 2.4%. China’s Shanghai Composite Index was down 0.2%.
Ref: https://www.wsj.com
