Markets “In a Nutshell” for November 1, 2021
Investment Week at a Glance
Stocks finished higher for the week. The Dow Jones Industrial Average rose 0.40%, the S&P 500 was up 1.30%, and the NASDAQ rose 2.70%. Foreign stocks (MSCI EAFE) were also up, rising 0.70%. Bond prices were higher for the week, with the 10-year U.S. Treasury ending the week at 1.56%. (Data source: Wall Street Journal)
Equities once again moved higher this past week and ended the month of October up 6.6%. The strong month comes after a weak September where equities fell by more than 5%. The market was also able to weather Apple and Amazon falling short of earnings expectations which shows this recent move higher in the market has been spread out and not just concentrated with the mega-cap companies. The VIX, which measures market volatility, fell below 17 which was where we were before the Pandemic. This supports the positive sentiment of the market as investors are showing they do not believe market volatility will be an issue in the short term.
Washington’s Impact on Markets
Last week Biden unveiled his new $1.75 trillion social spending framework. Originally the plan called for $3.5 trillion of spending and higher corporate taxes, capital gains taxes, and income taxes which caused some worry to the market. However, the Democratic party could not agree on all of these policies and the potential tax hikes will be much less than first proposed. The market has reacted to this news positively but the market is most likely expecting some package to be passed along with the $1.2 trillion infrastructure package. If these were to fall through, this could cause the market to have increased volatility with not as much money being pumped into the economy. The Democratic party has said these votes should happen this week, so many investors will be paying close attention to Washington and how it will affect the market going forward.
What was the highest Corporate Tax Rate in U.S. History? (Scroll Down for Answer)
Have a Great Week!
4) 52.8%, In 1968 the Corporate Tax Rate was at its all-time high, the lowest was in 1910 at 1%. The current Corporate Tax Rate is 21%.