Not sure about that. You would be correct if the employer's half was a full tax credit for the business, but it is only deductible. As such, the majority of this payment is a direct tax increase on the cost of its workforce.
OT: Stock and Investment Thread
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As Tom Lee says, these artificial disruptions to the market are always buy the dip moments since they quickly resolve.
Disagree. A full tax credit would balance things if the employee's tax rate on the benefit was 100%. That's not the case.
Dec 2024 is not up yet.
2023 was $350B export to Can. $418B imported. Deficit of $64B.
That deficit has increased in recent years as we've bought more oil/energy. I'm looking for the breakdown on that.
I’m not an economist, but if we lower income tax and raise tariffs to keep federal deficits in check, we’re shifting from an income tax system to a consumption-based tax system. That’s a big change! Would this consumption-based tax system eventually slow down spending and hurt our economy? It would totally change how we do business and invest.
It will be interesting to see how things play out in DC over the next few months. However, I haven't seen or heard of any serious talk about lowering income tax rates further (and obviously not eliminating it). I don't know if tariffs are to help with current deficits or if Trump honestly wants to use them for other purposes (i.e., bargaining chips).
But as I mentioned above, I just don't understand how tariffs work with nations like Canada and Mexico - i.e., those without large trade imbalances. I get it with China.
If tariffs are used to reduce deficits, it’s like poor people are footing the bill for the government’s overspending.
I am supportive of most of Trump's economic policies - just not tariffs, especially with countries other than China. These don't make sense to me.
Which to me means it’s likely posturing to get border concessions he can chalk up as a win for his base. Hopefully Bessent has a strong voice
This makes sense to me and could be a good move for the long-run. Bessent is a strong, reasonable voice. I have to imagine that Trump selected him for a reason.
Tariffs on Mexico are often intended as tariffs on China.
China has been industrializing Mexico with intention of flooding US markets with good made in China.
China also saw these moves as ways to avoid US tariffs.
Some major Chinese fabs under construction have already stopped
DC drives US manufactures over a cliff and CCP benefits
An industrial Chinatown near the US southern border readies its options should Trump tariffs come
"The huge industrial park sprawls across the rural landscape with row upon row of warehouse-sized manufacturing units. But this development is thousands of miles from Beijing or Shanghai — and just a few hours’ drive from the Texas border, in northern Mexico.
Much of the growth owes to the phenomenon of “nearshoring” — Chinese companies moving production to Mexico to have tariff-free access to the US market under the USMCA trade deal.
"With street signs in both Chinese and Spanish and the flag of the People’s Republic flying high alongside that of Mexico, this is one of many “industrial Chinatowns” that have been created in recent years around Monterrey, turning farmland to factories and boosting the local and national economies.
Good segment on the tariffs:
Also, Goldman Sachs out with a note saying that they expect the tariffs to be "short-lived".
Also, Goldman Sachs out with a note saying that they expect the tariffs to be "short-lived".
NASDAQ 100 futures getting pummeled. (Down 2.55%). Should be interesting to see if there are any opportunities, or wait to things settle. I’m going to be cautious, but will look for any opportunities that make sense to me. (i.e. stocks that are fairly or undervalued, but drop with the rest of the market in sympathy.)
On Friday morning I bought an international stock etf. Bad timing
Agreed, Panama has already agreed to boot China from canal projects and to leave the Silk Road Initiative.
This is the most ham-fisted, aggressive foreign policy the US has pursued in decades if not ever, but the administration is adjudicating its foreign goals quickly.
As of now: Dow down 1%. S&P down 1.5%, Daq down 2.2%. Not awful.
Any thoughts on what type of stock or sector may get hit the most? Would love to buy some dips.
How is Canada supposed to stop US Residents from smuggling fentanyl through the border? It’s US Customs agents which do inspections and Canada doesn’t have a role here.
He’ll extract some token concessions then claim some grand victory, as is his MO.
Jim Rickards called election perfect - down to the seats.
He's calling for recession and suffering like in Reagan's first 2 years and then good days like Reagan eventually had. A lot of people have happy recollections of the 80s but forget the 81-82 gut punch needed to get back to center.
First up - 1) market crash (he explains details) then 2) recession and 3) currency wars
Pertaining to stocks:
We are now positioned for an historic crash. The specific cause does not matter – it could be war, natural disaster, a bank or hedge fund collapse or other unexpected event. What matters is the super-fragility of the market when the trigger is pulled. This is why Warren Buffett has over $300 billion in cash and why central banks are buying gold.
Investors should prepare now; don’t be the last one to know. Strategies include reducing allocations to stocks, increasing allocations to cash and purchasing some gold (up to 10% of your investable assets) to participate in a flight to quality.
In the last few weeks 40,000 LA acres are rubble, AI turned into a pumpkin and China tried to slick a coup in S Korea (hardly any coverage). Foundation cracks everywhere
Rickards
https://en.wikipedia.org/wiki/James_Rickards
He's calling for recession and suffering like in Reagan's first 2 years and then good days like Reagan eventually had. A lot of people have happy recollections of the 80s but forget the 81-82 gut punch needed to get back to center.
First up - 1) market crash (he explains details) then 2) recession and 3) currency wars
Pertaining to stocks:
1. Stock Market
Markets are at or near all-time highs based on every available metric: P/E ratios, the CAPE ratio, market cap/GDP ratio, concentration risk, etc. This stock market bubble is amplified by indexing, investor complacency and analyst euphoria. When such conditions have existed in the past, they have always been followed by market crashes of 50% to 90% unfolding over several years. Examples include the Dow Jones Industrial Average (1929), the Nikkei (1989), NASDAQ (2000), and the S&P 500 Index (2008).We are now positioned for an historic crash. The specific cause does not matter – it could be war, natural disaster, a bank or hedge fund collapse or other unexpected event. What matters is the super-fragility of the market when the trigger is pulled. This is why Warren Buffett has over $300 billion in cash and why central banks are buying gold.
Investors should prepare now; don’t be the last one to know. Strategies include reducing allocations to stocks, increasing allocations to cash and purchasing some gold (up to 10% of your investable assets) to participate in a flight to quality.
In the last few weeks 40,000 LA acres are rubble, AI turned into a pumpkin and China tried to slick a coup in S Korea (hardly any coverage). Foundation cracks everywhere
Rickards
https://en.wikipedia.org/wiki/James_Rickards
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Tough to tell, but likely will be all the tech stocks that have unsupported high valuations, including several of the Mag 7. I have a handful of these, but have a well balanced portfolio, so not overly concerned.
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"Unsupported" - not sure about that. Plenty of reasonable tech valuations. I'm hoping Walmart and some of the banks get hit. I would be happy to buy those dips.
Sounds like Trump just wants the other countries to up their purchases of US goods.
AAPL (own) with a P/E of 34 (way high compared to its historical valuation), TSLA price is based on very aggressive expectations, and PLTR valuation seems way high. Honorable mention (GLW, COST (own), META, CRM (own), AMZN (own), and NVDA (own).
Reagan's first 2 years came after 8-10 years of down markets, since at least the oil shock of '73-74 and the subsequent stagflation. I don't see oil tripling and interest rates hitting 15% so the situations are not analogous.
Sounds like when he got China to promise they would buy more US goods. They bought much less.
He’ll be bailing out Jim Beam and Jack Daniel’s.
AAPL valuation is reasonable, especially when you factor in past and future buybacks. AAPL's float has gone from 25B shares to only 15B over the past 10-12 years. And more importantly, its future plans are even more aggressive. With a cash flow that is practically endless, AAPL share prices will continue to go up and up.
TSLA is purely a sentiment stock based on FSD and robots. Current valuation is completely meaningless. NVDA is cheaper now than any time in its history. META is fine. PLTR is very high (which I sold at $71).
Those tariffs on China were never removed since they didn't fulfill their promises. Even Biden left them in place.Sounds like when he got China to promise they would buy more US goods. They bought much less.
He’ll be bailing out Jim Beam and Jack Daniel’s.
Paul Tudor Jones on Squawk this morning, “The market could have a 30% correction and would still be slightly overvalued”
And when the math changes back, the face ripping rally happens in a blink of an eye.
When the market goes up 75% of the time, it is mathematically moronic to be anything other than a perma-bull.
But you now sell stocks I see when 4 years ago, you only brought indexes. When you sell stocks, you’re right but when other sell stocks, they are wrong. Interesting
there’s no right or wrong, some want to take profits and other have a lower tolerance, maybe they need the money to pay the mortgageI actually don’t care how others are doing in the market. I just want to keep making money.
My personal/stock account is a relatively small portion of our overall portfolio. Well over 90% is still ETFs and funds (mostly passive, but some active). But yes, the stock picking has been fun and exciting.
Just imagine you can time it right. I was lucky enough to do that during GFC. I don’t think this is anywhere near that. I do think it’s time to sit on cash and be patient.