Get the latest BPR news delivered free to your inbox daily. SIGN UP HERE
CHECK OUT WeThePeople.store for best SWAG!
While Wall Street set one earnings record after another under President Donald Trump, a vast majority of investors don’t believe stocks will perform nearly so well under a prospective President Joe Biden, according to a new CNBC survey.
Conducted earlier this month, CNBC asked “100 chief investment officers, portfolio managers and CNBC contributors who manage money about where they stood on the upcoming year for stocks under a new administration.”
Fully two-thirds of respondents said they believe that the first four years of a Biden presidency will be “worse for stocks” that President Trump’s term.
The financial news outlet went on to point out that since the president was inaugurated Jan. 20, 2017, stock indices have skyrocketed, including the S&P 500, which has grown 60 percent “thanks in part to the president’s landmark corporate tax cut” that created soaring profits “and a record in share buybacks,” CNBC reported.
In addition, President Trump either relaxed or eliminated reams of regulations over the past four years, beginning with a very early executive order directing federal agencies to cut two existing rules when implementing one new one.
CNBC said that many investors who were surveyed are fearful that Biden — and Democrats if they wind up with control over Congress following next month’s two Senate run-off elections in Georgia — will make good on pledges to reverse Trump’s tax cuts.
The cut lowered the corporate tax rate from 35 percent to 21 percent; Biden has pledged to raise it by half, back to 28 percent.
“I’m going to get rid of the bulk of Trump’s $2 trillion tax cut,” Biden told Wall Street donors during a fundraising conference call over the summer. “And a lot of you may to like that but I’m going to close loopholes like capital gains and stepped-up basis.”
Raising corporate tax rates again is likely to reignite so-called ‘corporate flight,’ economists argue.
CNBC reported in April 2016 that a “‘Made in America’ exodus” had occurred during the Obama-Biden years, with at least 10 “iconic U.S. companies” relocating their corporate headquarters in lower-tax countries:
Burger King: The restaurant chain relocated to Canada in 2014 after acquiring Tim Horton’s, avoiding some $275 million in taxes.
Budweiser: The beer maker was bought out by InBev in 2008, and though it still bases its North American HQ in the company’s hometown of St. Louis, the corporate HQ is now in Belgium, where InBev is located.
Medtronic: Founded in Minneapolis in 1949, the medical device manufacturer moved its corporate headquarters to Ireland in 2014, where the corporate tax rate is just 12.5 percent. At the time, the top marginal corporate rate in the U.S. was 39.6 percent.
Seagate Technology: The hard-drive maker was founded I Cupertino, Calif., but moved its global HQ to Ireland in 2010.
All said, however, most investors also said they believe the Dow Jones Industrial Average will continue to set growth records at least for 2021. But about one-third said they think the blue-chip benchmark index will stagnate or dip to at least 25,000 from its current level at just over 30,000.
Investors surveyed by CNBC said they believe that Biden’s policies will “create headwinds” overall for the markets, but that some sectors including industrials and financials will do the best.
Energy, consumer staples, and utilities, however, are likely to suffer, according to the surveyed investors.
- Joy Reid rolled after claiming she was ‘hesitant’ of Covid vax under Trump because she’s ‘rational’ - September 17, 2021
- Haley rips Milley for ‘having the back of Chinese’; Milley defends himself saying call ‘perfectly’ acceptable - September 17, 2021
- Tucker: Biden’s open border causing deadly crises among America’s youth. Why doesn’t he care? - September 17, 2021