Thursday April 22, 2021
Wall Street damper
Biden’s tax plans scare off investors
The Biden government’s climate targets are fueling investors, but it doesn’t stop there. In the afternoon, plans leaked out by the US government, which intends to tax high stock market profits heavily in the future. That spoils Wall Street’s day, all indices slide into the red.
The New York stock exchanges revised their previous day’s profits again. The reason that the indices slipped deeper into the red, especially in the second half of the day, was believed to be tax plans by US President Joe Biden. According to a report, this wants to tax capital gains more heavily in the future. The Dow Jones Industrial fell in the end by 0.94 percent to 33,815.9 points. This did not come close to the previous record, which is already a week old with 34,256 points. The market breadth S&P 500 fell on 0.92 percent to 4134.9 points. The technology-heavy one Nasdaq 100 lost 1.24 percent to 13,762.3 meters.
As the Bloomberg news agency reported, citing circles, Biden is willing to propose a capital gains tax of more than 40 percent for wealthy Americans. That would roughly double the levy, it was said. This has triggered speculation in the market that some investors will still pay their positions before the introduction in order to take advantage of the lower tax rate, experts said.
According to market strategist Stephen Innes from the broker Axi, professional traders such as hedge funds would be particularly affected. “One point of concern is that these contribute a great deal to liquidity in the stock market,” said the expert. He emphasized that the market had generally expected higher taxation. But it was not clear when this would come. Investors now expected an introduction sooner rather than later.
US climate targets ignite the imagination
Biden also created a topic of conversation with a new climate protection target. At an online meeting with 40 heads of state and government, the US president called for swift action. He himself announced that he would like to cut US greenhouse gas emissions by at least half compared to 2005 by the end of the decade. In the case of stocks from the alternative energy sector, this sparked imagination among investors, the stocks of First solar for example increased by 4.2 percent.
In terms of the individual values, the most recent quarterly reports were mostly positive. The shares of the telecommunications giant posted significant price gains of 4.2 and 3.5 percent respectively AT&T and the conglomerate Danaher. In both cases, the results exceeded the average analyst forecast.
Profit-taking on pharmaceutical stocks
Shares in the US chemical company Dow Inc on the other hand, lost six percent after the numbers were presented. Experts suspected that after a set of figures that was actually considered convincing, investors were now taking profits. The price had roughly tripled within a year since the Corona low in March 2020. The course of Biogenic sagged by four percent, although the published figures were above the analyst consensus. RBC expert Brian Abrahams wrote that the pharmaceutical company’s sales continued to feel competitive headwinds in many key segments. He warned of further risks in the company’s core business.
The SAP market research subsidiary caused a stir Qualtricsthat went public in the US at the end of January. The paper recovered by almost 23 percent from a decline that began shortly after the initial listing. They reacted to several upgrades by analysts and the quarterly figures presented the night before after the market closed. An optimistic outlook for the current quarter of the year was particularly praised.
The shares of also showed a strong recovery Nikola, a Tesla industry colleague who specializes in commercial vehicles. After fluctuations in the middle of last year, things had become much calmer for the papers, most recently the shares were traded below ten US dollars at the level before they came into focus. According to the RBC expert Joseph Spak, the company has now announced a new cooperation in the construction of hydrogen filling stations. The shares rebounded 14.4 percent.
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