Has Anything Really Changed?
Last week was an interesting one for major asset classes with some moving in line with expectations and others moving against the grain. Of note was the jitters seen in equity markets on Thursday as fears of much higher Capital Gains Taxes saw some downside, but apart from some short-term scares it’s important to keep in mind that nothing has really changed.
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On the tax fears, it was largely unwarranted if you think about the details under the hood. Firstly, impact from hike in CGT are usually short-lived according to research done by Goldman Sachs.
Secondly, proposing an almost doubling of the rate is one thing, but getting it approved and passed into law is quite another when you have such a razor thin majority in the senate. So, just because that is the proposal, doesn’t mean that is where the rate will end.
Apart from equities, the other big head scratcher has once again been US10Y, which have kept struggling to push higher despite the inflation and growth picture continuing to grow from strength to strength. Which means, all else remaining equal, it should become more and more difficult for yields to stay low in the coming weeks.
In the week ahead there are a couple of event we are watching for some possible opportunities such as Wednesday’s FOMC meeting, Thursday’s Q1 GDP and of course some big names reporting Q1 earnings this week.
We’ll go through all of that in this week’s week ahead video.
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Highlights of the video:
00:27 – Current Baseline
05:27 – Baseline expectations for the upcoming week
14:23 – Sentiment Shifts & Trade Plan
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If you find these weekly analysis and trade ideas useful, you’ll love Financial Source. There’s a link below where you can learn more about it
https://financialsource.co
----
We interpret and explain price moves in real-time, 24 hours a day. Our team of analysts produce text, video and audio commentary.
You understand the markets and trade with confidence. Learn more at our website here: https://financialsource.co
-----
On the tax fears, it was largely unwarranted if you think about the details under the hood. Firstly, impact from hike in CGT are usually short-lived according to research done by Goldman Sachs.
Secondly, proposing an almost doubling of the rate is one thing, but getting it approved and passed into law is quite another when you have such a razor thin majority in the senate. So, just because that is the proposal, doesn’t mean that is where the rate will end.
Apart from equities, the other big head scratcher has once again been US10Y, which have kept struggling to push higher despite the inflation and growth picture continuing to grow from strength to strength. Which means, all else remaining equal, it should become more and more difficult for yields to stay low in the coming weeks.
In the week ahead there are a couple of event we are watching for some possible opportunities such as Wednesday’s FOMC meeting, Thursday’s Q1 GDP and of course some big names reporting Q1 earnings this week.
We’ll go through all of that in this week’s week ahead video.
-----
Highlights of the video:
00:27 – Current Baseline
05:27 – Baseline expectations for the upcoming week
14:23 – Sentiment Shifts & Trade Plan
----
If you find these weekly analysis and trade ideas useful, you’ll love Financial Source. There’s a link below where you can learn more about it
https://financialsource.co
