Taxing times for equities and economists

Posted by: Paul Donovan

03 Apr 2019
  • US President Trump's trade taxes hurt US listed companies. This caused the equity market to underperform the economy dramatically last year. Hopes of an end to those taxes have caused a remarkable equity rally this year. Now Chinese Vice Premier Liu arrives in Washington to try and do a deal. Markets already expect a deal.
  • Assorted service sector business sentiment opinion polls are released today. Of more importance, Eurozone retail sales are due. Eurozone consumers have been doing OK – as well they might, given how strong the Eurozone labor market has been.
  • US ADP payrolls come out to give a (not very reliable) hint as to what might happen in Friday's employment report. US companies seem to be having problems finding anyone to fill the job vacancies they have.
  • The interminably tedious EU-UK divorce is to become more interminable. The UK prime minister, working on the principle "my enemies' enemy is my friend", is to meet with the leader of Her Majesty's Loyal Opposition to agree on a plan. This would require the leader of HMLO to take a clear position. The three investors still awake through all this nonsense seem to view this as a soft Brexit signal.