Stimulus
House Speaker Nancy Pelosi told CNN on Sunday that she was expecting more answers regarding a stimulus package on Monday and that an agreement could be reached this week among lawmakers. But Democrats and White House officials are blaming each other for the lack of progress after the two sides went into the weekend without a deal, dimming hopes for an agreement before Nov. 3.
In other news, the Senate voted 51-48 Sunday afternoon to limit debate on the Supreme Court nomination of Judge Amy Coney Barrett, setting up a vote on her confirmation for Monday evening.
Debate
A panel of swing voters give the debate win to Trump, but GOP pollster Frank Luntz says Biden will win the war based on polling leads. However, more than 50 million Americans have already submitted their votes during early voting. So for many, the debates did not matter.
Pollster Frank Luntz warned the industry is “done” if Trump defies odds again: “It's finished,” he said. President Trump stated we cannot close the nation again. Regarding the virus, he said, “99.9% of young people recover. 99% of people recover. We have to recover. We can't close up our nation, we have to open our schools, and we can't close up our nation, or you're not going to have a nation.”
Tax Policy
Biden’s tax plan could create a tax rate of as much 62% for New Yorkers and Californians, studies show.
Increase the maximum federal tax rate on ordinary income from 37 percent[xii] to 39.6 percent.
Increase the federal tax rate for long-term capital gains and for qualified dividends from 20 percent[xvi] to 39.6 percent. [xvii]
Phase out the 20 percent qualified business income deduction for higher income taxpayers. [xxvii]
Limit the benefit of itemized deductions for higher income taxpayers. [xxviii]
Impose social security taxes on income over $400,000.
Limit the use of like kind exchanges of real property to investors with annual incomes of not more than $400,000.
Eliminate the step-up in basis for assets acquired from a decedent.
Reduce Gift, Estate and GST Tax Exemptions
Increase the federal income tax rate on C corporations[xlv] from 21 percent to 28 percent.
COVID-19 Update
New Cases continue to surge. So far, the growth rate has been slower than the previous two surges, but the daily count is higher. We have not seen a similar increase in daily deaths, but it is increasing as well.
Flu Cases this year are off to a slow start. We are not peddling a conspiracy theory, but rather believe those on the margin of the spread of COVID bore its brunt. Unfortunately, many have died, and for a short period of time we have a healthier sample population. People still age, so it will eventually increase again. Also, social distancing and reduction in economic activity is also contributing to the slow start:
The question on everyone’s mind is, will there be another shutdown? As long as the medical system is not burden (meaning deaths remain low relative to new cases), we do not believe we will see another shutdown.
The Economy
There is some evidence of reopening, For one thing, more people flew in the U.S. over the weekend of Oct. 16-18 than at any other point during the COVID-19 panic, the Transportation Security Administration reports.
Still, many Americans are operating under an abundance of caution. New data reveals just how many temporarily moved to escape the pandemic.
The Market & Money Supply
The latest numbers show 13-week annualized is at 11.5%; last week, it was 13.0%. This contrasts with the early July peak growth of 62.7%. There is still a lot of new money in the system from the earlier money pump, but the upward pressure from that pump is going to wane over time with the stock market (not consumer price inflation--that has a long way to go).
For more information, be sure to tune in Monday – Thursday on Facebook and YouTube live for our “Daily 3x3” livestreams and Wednesday “Market Updates.” Follow GWS on Facebook and YouTube so you never miss a broadcast!
If you have any questions, please contact your Lead Advisor or any other member of our team. We are here for you.
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Disclosures:
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and may not be invested into directly. The economic forecasts set forth in this material may not develop as predicted and there can be no guarantee that strategies promoted will be successful. All investing involves risk including the possible loss of principal. No strategy assures success or protects against loss. Dollar cost averaging involves continuous investment in securities regardless of fluctuation in price levels of such securities. An investor should consider their ability to continue purchasing through fluctuating price levels. Such a plan does not assure a profit and does not protect against loss in declining markets.
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