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From your mouth to....

By: StudioCity'98

...to gospel on Tax 2.0, I wish it were true.  But I think that was just campaign rhetoric. That's just something he threw out off-the-cuff thinking it may help in tight races. There's no will for it in Congress or even any committees working on further tax Bills right now. We're still waiting on TONS of clarification of ambiguities from Congress, and guidance from the IRS on TCJA. 

If the Donkey's take the House no additional tax cut will make the Dockett. More likely $1Trillion USD Budget deficits will be the main talking point heard everywhere during the next two years.

In a rising rate environment, each tick up in rates creates exponentially more interest on government obligation as a proportion of GDP, which creates higher rates demanded by Bond buyers at Treasury auctions, which in turn creates higher interest payments...a vicious cycle.

Plus, rising rates creates quantity demanded for the $USD which is appreciating against all other FX right now. Eventually, like soon, that's going to start hitting earnings of US multi-nationals who derive huge fractions of their revenues from overseas sales.

I haven't seen polling returns today, but likely regardless of outcome will see some market rise going into year-end as PM's are in buying trying to catch up to their benchmarks.  After the first of the year, we'll what matters then.

Much more important than Mid-Terms is China. China trade and IP theft is a huge, complicated issue. I'm not optimistic about. Either, they get together at G20 and sign some meaningless deal and each claim victory, or they don't and each side digs in for trench warfare. I see no catalyst for China to come to the table. I think they think they can create more internal demand (relying less on exports) through tax cuts, infrastructure spending, and renminbi deval as they did in 2008, 2014, 2016.

If they do sign some deal for optics purposes it will be 'buy first and ask questions later.' Both Bonds and Equities will react fast and hard until people begin to ask hard questions and point out nothing got solved.

If they don't do anything in Buenos Aires...well, everyone knows that will suck. 

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