The pattern shift first noticed the end of September is now in it's 13th week. BofA Merrill Lynch confirms the shift with 11 out of their 19 bear market signals being triggered. Are the Feds ready?Tax law changes and repatriation provides fuel to push stock and bond markets higher. Of course, there are some positive changes for individuals that should put more money in their pockets and (hopefully) stimulate spending, but those changes are temporary.
For corporations, most of the benefits are permanent. In addition, multinational corporations also get to repatriate trillions held overseas at a 15.5% tax rate.
This has been sold to the public as increasing wages and a hiring boon, but a Bank of America Merrill Lynch survey paints a very different picture. So does history.
The 2005 tax repatriation (which was sold the same way) saw corporations use those funds to buy back stock and issue a special dividend. In addition, some of the biggest corporate beneficiaries actually laid off thousands of US workers. Will this time be different?
So how has spot gold responded? Quietly up year over year, because frankly, that is the real flight to safety trade.
Lynette Zang has held the position of Chief Market Analyst at ITM Trading since 2002. Ms. Zang has been in the markets on some level since 1964. Her mission is to convert financial noise into understandable language. She has been a banker, a stock broker and studied world currencies since 1987. She believes strongly that we need to be as independent as possible and at the same time, we need to come together in community in order to survive and thrive through the hyperinflation she sees in the near future.