A Stickler for Math
DOW + 40 = 22,381
SPX + 3 = 2510 (record)
NAS + 0.19 = 6453
RUT + 3 = 1488 (record)
10 Y un = 2.31%
OIL – .56 = 51.58
GOLD + 4.30 = 1287.70
- Number of Currencies: 872
- Total Market Cap: $137,946,002,185
- 24H Volume: $4,334,119,332
|Name||Symbol||Price USD||Market Cap||Vol.||Total Vol. %||Price BTC||Chg. % 1D||Chg. % 7D|
The S&P 500 and the Russell 2000 hit record high closes. The S&P is up 1.5 percent this month, on track for its sixth consecutive monthly gain. September is normally the worst month for stocks.
The Commerce Department released its third and final estimate of second quarter Gross Domestic Product. Second quarter GDP was revised to 3.1%, up from the earlier estimate of 3%. Growth last quarter was the quickest since the first quarter of 2015 and followed a 1.2 percent pace in the January-March period.
With GDP accelerating in the second quarter, the economy grew 2.1 percent in the first half of 2017. Hurricane damage is expected to put a dent in third quarter GDP, but give a little boost to fourth quarter numbers. Estimates for the growth rate in the July-September period are just above 2.2 percent.
Details of the Republican tax plan have yet to be filled in, so we can’t say yet who would pay what. The 9-page proposal released yesterday specifies three income tax brackets — 12%, 25%, and 35% — but it doesn’t say what income levels they would apply to.
It says the $4,050 exemption that taxpayers currently get for each dependent child would be abolished, to be replaced with an unspecified increase in the per-child credit. It says tax-writing committees would provide families “additional tax relief” that they are not prepared to describe yet.
And because Senate rules will require the plan to fit within a budget resolution that will most likely allow only $1.5 trillion in revenue losses over a decade, lawmakers will have to trim its proposed tax cuts — or add new tax increases — to meet that specification before it can become law.
While there is a lot we don’t know, we can identify a group of taxpayers likely to face tax increases from this proposal: people with moderate to upper-moderate incomes who take itemized deductions, like those for mortgage interest and state and local taxes paid.
Some of these deductions would be eliminated. And while Republicans like to misleadingly claim that their plan would “double the standard deduction,” these itemizing taxpayers would lose the ability to take the personal exemption for themselves or their spouses, subjecting an additional $8,100 of their income to tax.
While these taxpayers would lose key tax benefits, rich taxpayers would come out ahead. The rich would benefit from a new preferential rate for business income — while high-income workers could pay tax at rates as high as 35%, business owners would have tax on their profits capped at 25%.
Today, Chief economic adviser Gary Cohn told reporters that a typical four-person American family bringing in $100,000 a year would save $1,000 under the Republicans’ proposed tax reform effort, which they could use to pay for a new car or a kitchen. Or not.
Cohn didn’t explain the math behind the $1,000 in savings but the rest of the math is wrong. In actuality, the average American family makes $74,000 a year before taxes, or about $30,000 less than that, according to the Bureau of Labor Statistics. The median American family income is roughly half of Cohn’s estimate, or only about $55,000.
And I don’t think I can remodel my kitchen or buy a new car for $1,000. Cohn also claimed, “The wealthy are not getting a tax cut under our plan.” That’s simply not true. This is a huge tax cut for the top 1 percent. Math will be an important part of any tax plan, something the politicians haven’t figured out yet.
Puerto Rico is struggling to recover from what its governor called its “biggest catastrophe in modern history,” with Hurricane Maria’s devastation spiraling the country into a humanitarian crisis. After much criticism that the U.S. was not doing enough to help, Trump waived the Jones Act to speed up shipments to the island.
The Jones Act is a 1920 law that prohibits foreign boats from shuttling goods between US harbors. That will make it a bit easier to get food, water, and other products to Puerto Rican ports. But it will have little impact on what is a more pressing problem. Getting supplies from those ports to the people who need them.
Thousands of cargo containers bearing millions of emergency meals and other relief supplies have been piling up on San Juan’s docks since Saturday. Even with moves to ease shipping to the island, the docks have become choke points in the effort to aid storm survivors and may not reach those who need them for days. If nothing else, Maria is a cautionary tale about the vulnerabilities of the supply chain.
The Facebook group United Muslims of America was neither united, Muslim, nor American. Among their various tactics, Russians impersonated real American Muslims to stir chaos on Facebook and Instagram. (And let’s not leave out Twitter, since the Russians didn’t).
Twitter today disclosed to congressional investigators that more than 200 Russia-linked accounts had been used to spread propaganda and misinformation on the company’s platform. The company said that, over the coming months, it will be introducing new ways to detect malicious activity, although it did not provide specifics.
The European Union is once again asking Facebook, Google, Twitter, and other web companies to crack down on hate speech and speech inciting violence and terrorism — but this time, it’s taking things a step further. The European Commission has issued guidelines for web companies to follow, and it’s warning the companies that, if they don’t comply, the Commission may pass legislation. And that legislation, of course, could lead to some huge fines.
The Supremes are back on the bench. The Supreme Court kicked off their new term with the justices hearing three consolidated cases with far-reaching implications for wage-earners. The cases—Epic Systems Corp. v. Lewis, Ernst & Young LLP v. Morris, and National Labor Relations Board v. Murphy Oil USA, Inc.—are all about whether employers have the right to compel workers go through onerous individual arbitration proceedings in order to bring labor law claims.
If the justices answer that question in the affirmative, then the affected workers will—as a practical matter—find it nearly impossible to win back pay in cases involving wage law violations. In the typical case involving wage law violations plaintiffs bring what’s called a collective action (similar, but not identical to, a class action) to recover back pay from a common employer.
Each worker’s claim might be worth only a few hundred or few thousand dollars, but when the defendant is a large firm with lots of similarly situated employees, the collective action might be worth millions. It’s much easier to find competent counsel to litigate a potentially more lucrative collective action.
To pre-empt this possibility, more firms are inserting individual arbitration clauses into employee contracts. In a series of opinions in recent years—including three authored between 2011 and 2013 by the late conservative Justice Antonin Scalia—the court has repeatedly ruled that consumers were barred from bringing class actions by arbitration clauses they had signed as a condition of receiving a product or service.
In the first three years after the court’s pro-arbitration ruling in AT&T Mobility v. Concepcion in 2011, the number of companies using arbitration clauses to preclude employee class actions jumped from 16.1% to 42.7%. Almost 25 million private-sector, nonunion employees are now subject to class waivers contained in arbitration clauses.
Though the three specific cases before the court all involve overtime claims under the Fair Labor Standards Act, the precedent that will be created appears likely also to impact class claims brought under the Equal Pay Act, the Family Medical Leave Act, the Age Discrimination in Employment Act, and Title VII of the Civil Rights Act.
Every time the price of a barrel of crude rises above $50, US shale drillers ramp up production to take advantage of the surge. Then, as supply increases, prices fall. We may be seeing the start of that trend again after oil rose from $46 to more than $52 only to ease back closer to $51 today. Government data released yesterday showed American drillers lifted output almost 9 percent during the past three weeks, the biggest three-week increase in half a decade.
Drug maker AbbVie climbed after it resolved a patent dispute over Amgen’s version of AbbVie’s drug Humira, which is the source of most of its revenue. Amgen agreed not to begin selling its version of the anti-inflammatory medicine in Europe until October 2018, and the U.S. version won’t go on the market until Jan. 31, 2023. The settlement would mean billions of dollars in additional sales for AbbVie, which reported $16 billion in Humira sales in 2016.
Abbott Laboratories jumped after the Food and Drug Administration approved its FreeStyle Libre Flash glucose monitoring system for adults with Type 1 diabetes. The product uses a sensor inserted below the skin to measure blood glucose. Analysts say Abbott could have a competitive edge because the FDA did not advise patients to take samples of their blood to confirm the system’s readings.
Drugstore chain Rite Aid dropped after its quarterly revenue fell short of Wall Street’s forecasts. The stock lost 26 cents, or 11.2 percent, to $2.03. Earlier this month the company agreed to sell almost half of its stores to rival Walgreens for $4.38 billion, but the slimmed-down deal was smaller than investors had hoped.
Ikea has purchased TaskRabbit, which is a gig-economy app that lets users pay a handyman to assemble their Ikea furniture. That’s the kind of can-do spirit that we need around here.