Stock market action dull on Thursday, but Friday could pop

Markets digest Trump tax outline, Cliffs Industries tanked after earnings report, but Amazon and Alphabet earnings dazzled after-hours traders.

0
389
Amazon's Jeff Bezos is smiling. (Circa 2010 image via Wikipedia entry on Bezos)

WASHINGTON, April 26, 2017 – Fairly short report today as stock market averages essentially flatlined on Thursday, perhaps still digesting President Trump’s tax outline presentation from Wednesday; the possibility of another stab a Obamacare repeal, replace, or something else; and the big earnings and sales increases for the ever-more monster-sized Amazon (symbol: AMZN) and that other tech behemoth, Alphabet, aka Google-all-divisions (GOOGL).

No surprise on Amazon. For better or ill, Bezos & Co. have been systematically destroying storefront retail as we know it, administering a near-fatal dose of competition for a few retailers this past Christmas. Oddly, Amazon’s shares have soared so high of late, that the stock is getting some sell recommendations by analyst who think the trade in Amazon is getting out of hand.

Alphabet-Google’s competition destruction derby operates another way entirely, by promoting or demoting articles or sites based on what seem to be constantly moving algorithms that assess new stuff faster than any less-than-huge website can adjust for.

(You can find Amazon numbers here and Google-Alphabet numbers here.)


Google’s latest algorithmic tweak is focused on:

  • Screening out “fake news.” (Which, alas, probably means things like this column, which, given its greedy, capitalist, libertarian tilt, risks being categorized as “fake news” on America’s left coast, even though we write about investing for the masses, not the elites.)
  • Screening out sites that push malware onto the unwary. (Double-plus good for this one if they can do it.)
  • Demoting sites that take too long to load on mobile devices. (Another relatively good thing, given that such sites gobble often expensive data time, which, for one subset of customers, can greatly increase their monthly bill.)

As for the market in general, the one-two punch from this pair of tech giants may very well goose tech stocks, which have been pretty robust even during the furtive correction of the big Trump Rally that’s been going on in recent weeks.

On the other hand, Cliffs Industries (CLF), a stock we usually discuss in our companion column, reported a big increase in sales for the current quarter, but a big miss on profit figures, causing the stock to take a metaphorical header off the high board. CLF shares, and our large-ish position in them, tanked right along with this selling panic, which occurred on huge volume.

Flip side: Cliffs apparently chose to eat some nagging costs in the past quarter and dramatically reduced its nerve-inducing high debt load. Looking ahead, the company is moving into iron ore contracts put in place with higher prices, so perhaps, we hope, this was the worst of it.

Plus, the company seems destined to return to a good measure of profitability in the near future if higher iron ore prices continue to hold. Fingers crossed. We’re holding, after taking a swig of Maalox this morning.

Re: That Trump Tax Reform outline, which is what the Administration presented, rather than a point-by-point plan. President The Donald is a quick learner and now understands, alas, that passing the good stuff you promised your voters has to run a nasty gauntlet of preening politicians before it can happen. Hence the outline, lacking specifics, which will likely show up later. Or as many of them will show up as the President can push through.

Here’s a great bullet-point summary ZeroHedge ran Wednesday, hitting the high points of the Trump tax proposal:

2017 Tax Reform for Economic Growth and American Jobs

“The Biggest Individual And Business Tax Cut in American History”

Goals For Tax Reform

  • Grow the economy and create millions of jobs
  • Simplify our burdensome tax code
  • Provide tax relief to American families—especially middle-income families
  • Lower the business tax rate from one of the highest in the world to one of the lowest

Individual Reform

Tax relief for American families, especially middle-income families:

  • Reducing the 7 tax brackets to 3 tax brackets of to 10%, 25% and 35%
  • Doubling the standard deduction
  • Providing tax relief for families with child and dependent care expenses

Simplification:

  • Eliminate targeted tax breaks that mainly benefit the wealthiest taxpayers
  • Protect the home ownership and charitable gift tax deductions
  • Repeal the Alternative Minimum Tax
  • Repeal the death tax
  • Repeal the 3.8% Obamacare tax that hits small businesses and investment income

Business Reform

  • 15% business tax rate
  • Territorial tax system to level the playing field for American companies
  • One-time tax on trillions of dollars held overseas
  • Eliminate tax breaks for special interests

Looks pretty good to us. So far. We’ll halt today’s column here, since we’re told fans of Internet journalism don’t like the stuff they read to run too long.

More tomorrow unless we find ourselves on the road. Beware: Despite today’s one-two Amazon-Alphabet tech win, that always-looming “government shutdown” could steal the headlines tomorrow and stampede the market’s Nervous Nellie traders to bail.

Stay tuned.

Click here for reuse options!
Copyright 2017 Communities Digital News


This article is the copyrighted property of the writer and Communities Digital News, LLC. Written permission must be obtained before reprint in online or print media. REPRINTING CONTENT WITHOUT PERMISSION AND/OR PAYMENT IS THEFT AND PUNISHABLE BY LAW.

Correspondingly, Communities Digital News, LLC uses its best efforts to operate in accordance with the Fair Use Doctrine under US Copyright Law and always tries to provide proper attribution. If you have reason to believe that any written material or image has been innocently infringed, please bring it to the immediate attention of CDN via the e-mail address or phone number listed on the Contact page so that it can be resolved expeditiously.

SHARE
Previous articleNew Madonna biopic, Blonde Ambition, has Madge pissed
Next articleBoxing world awaits Clash of the Titans: Joshua vs. Klitschko, Saturday
Terry Ponick
Biographical Note: Dateline Award-winning music and theater critic for The Connection Newspapers and the Reston-Fairfax Times, Terry was the music critic for the Washington Times print edition (1994-2010) and online Communities (2010-2014). Since 2014, he has been the Business and Entertainment Editor for Communities Digital News (CDN). A former stockbroker and a writer and editor with many interests, he served as editor under contract from the White House Office of Science and Technology Policy (OSTP) and continues to write on science and business topics. He is a graduate of Georgetown University (BA, MA) and the University of South Carolina where he was awarded a Ph.D. in English and American Literature and co-founded one of the earliest Writing Labs in the country. Twitter: @terryp17