Market opened sharply in the green again but quickly gave up the gains after both the House and Senate take a victory lap with the passage of the tax bill. A procedural snag is forcing a re-vote in the House today, which is a mere formality. It will then go to the President for his signature and become law before Christmas, just as he wanted. The whole thing happened so much faster than expected. It is a very controversial bill that certainly doesn’t benefit everyone. Not one Democrat voted for it in the Senate. That isn’t a surprise. But it will be the law of the land and Corporate America will be a big beneficiary. Earnings should see another boost. The Stock Market likes it. Interest rates have been jumping this week, with the 10-Year Treasury punching through 2.4%, and approaching 2.5% for the first time since March. The 30-Year Treasury yield is 2.86%. That is a mere 37 bp spread. The yield curve has flattened substantially. It remains one of those nagging signs that things are not perfect. The Bond Market is the smartest of Markets. It pays to listen. The Street is raising estimates for Banks post-tax deal. Bitcoin has fallen 20% in 3 days, which constitutes Bear Market territory. It is still up massively this year.
Have a great morning,
Mike Frazier
