It’s a new week in the financial markets, and one that is off to a bit of a slow start.
There is hardly anything of importance in the economic calendar, save for two disappointing PPI reports for August from Japan and the monthly budget statement from the United States for the same month.
Today in the United States the news is likely going to be dominated by a discussion on a new tax reform proposed by the Democrats. Dems are looking for ways to tax corporations and the richest Americans more in order to fund their most recent stimulus bill proposal.
Reportedly, Nancy Pelosi and co will seek to increase the corporate income tax to 26.5% and also bump up the minimum income tax for the overseas profits of companies to 16.5%.
The tax plan may also include a 3% additional tax for individuals who earn over 5 million US dollars yearly. Furthermore, the capital gains tax will increase by 5% to reach 28.8% in the new proposal.
These relatively non-aggressive tax increases are expected to generate enough funding for the government to sustain Democrats’ latest stimulus package, which devotes more money to social programs like welfare and childcare, as well as investments in innovative technology, with a special focus on sustainability and renewable energy.
There has also been an interesting development in the commodity markets, where uranium is outperforming other assets in its class. Nuclear energy is once more coming to the forefront as a relatively clean way to produce power, at least compared to coal and gas, and a reliable one too, since the underdeveloped renewable energy infrastructure of most countries cannot keep up with the demand for power.
As a result, uranium has been in high demand and has spiked by 30% in the last few weeks alone.
In terms of the stock market, today all major US stock indices will make gains. The markets have calmed down a bit regarding the coronavirus pandemic, which has allowed for more risk appetite to permeate the market and boost stocks.
The same cannot be said for Chinese stocks, where the conflict between the government and the country’s biggest digital businesses such as Alibaba continues. Reportedly, China wants to split Alipay into two separate payment services and increase government control over them.
