Under an Obama administration income taxes look set to rise for the wealthiest households. So that’s a bad sign for the market, right?
Not necessarily, according to Deutsche Bank Private Wealth Management. In three of the four years following income tax increases of at least 10 percent, the Standard & Poor’s 500 index has risen.
The only time it fell was in the midst of the Great Depression, according to chief investment officer Benjamin Pace and chief investment strategist Larry Adam.
President-elect Barack Obama wants to boost the top tax rate for families earning more than $250,000 to 39.6 percent, from the current top rate of 35 percent.
Shares per gallon.
Since mid-October, a share of Ford has cost less than a gallon of regular gasoline. Sales of Ford and General Motors have plunged amid a weak economy and tight credit conditions.
As of Thursday’s market close, a share of Ford sold for $1.90 while a gallon of gasoline cost an average of $2.18 nationwide, according to AAA and the Oil Price Information Service. A GM share, meanwhile, costs nearly as much as a gallon of diesel, which averages $3.07 per gallon. Gasoline prices have been tumbling since setting a record of $4.11 on July 17; diesel set its record at $4.85 the same day.
Holiday humbug.
How bad will this holiday shopping season be for retailers? The National Retail Federation is looking for the weakest sales growth since 2002, up 2.2 percent from the prior year.
Last year, holiday sales rose 2.4 percent, and the average rate over the past decade is 4.4 percent. Best Buy Co. used the word “seismic” to describe the shocks endured by consumers since mid-September. Chief executive Brian Dunn said it’s the most difficult time since the company was founded 42 years ago. He forecasts sales at Best Buy’s stores open more than a year — a key retail gauge — could fall 5 percent to 15 percent from a year ago for the period from November through February.
Game of chicken.
Tyson Foods is playing what’s essentially a game of chicken with other producers, analysts say. The chicken industry is hurting, as feed costs are high and demand is weakening. The natural response, analysts say, is for companies to cut production. Tyson, though, has been standing firm.
Why? “Because they felt like they were the ones who cut production in previous quarters — now it was time for others to feel the pain,” says D.A. Davidson analyst Tim Ramey.
The Associated Press
