Washington made its way to Wall Street today. The Senate and House have been deliberating the tax bill.
Here’s a couple of points that came from the Senate:
- The corporate tax rate is to be delayed 1 year but permanently set at 20% in 2019.
- 7 tax brackets, with the highest at 38.5%.
- 4 tax brackets, with the top at 39.6%
Secretary of the Treasury Steven Mnuchin said he expects a bill to be ready by Christmas. Originally, President Trump wanted one by Thanksgiving.
The DJIA closed at 23,461.94, down 101.42, which translates to .43%.
The S&P 500 closed at 2,584.62, down 9.76, which translates to .38%.
The market seems to agree there is going to be an worthy tax package. Taxes have been a source of volatility. The CBOE Volatility Index closed at 10.50, up .72 or up 7.36%.
The VIX is a key measure of market expectations of near-term volatility conveyed by S&P 500 stock index option prices. Since its introduction in 1993, the VIX Index has been considered by many to be the world’s premier barometer of investor sentiment and market volatility.*
Markets are still bullish according to consensus. The tax bill is getting factored in. We’ll just have to keep an eye on volatility and see what the market totally expects from Washington.
*From the CBOE website