Transcript:
Tom Vaughan:
Everybody, welcome to Tuesday, the S&P 500 was down .85% today. It was an interesting day, all the things were hanging in there, the S&P was kind of at a breakeven, the NASDAQ was actually up. And then Janet Yellen was speaking to the U.S. Chamber of Commerce, and started to talk about the possibility of increasing corporate taxes to fund the American Jobs plan. And the market, you can see it right away, starting to fall right off of that standpoint. So it gave me a couple of pieces on that, just from my opinion.
If you look back, historically, corporate taxes, and stock market rates of return, and they’re not that heavily correlated. I remember some fantastic markets where the corporate tax rate was quite a bit higher than they’re talking about moving it to. Right now it’s at 21%, moving that to 28%. But it was higher than that, and we had better markets. And I’ve also heard that, really, in the negotiations, 25% is looking more likely.
So you know, we’ll see what happens. So I’m not that concerned about corporate taxes as a whole, I think there was more important information that was happening with, for example, we saw the price of oil come down quite a bit, because now there’s talk that Iran may be allowed to come back online, some negotiations, over their nuclear deal and what have you. And that would bring in a big supply of oil. And that’s a fairly important component, because a lot of times when you have a higher inflationary environment, you see that price of oil as part of that, and it can be quite high. So, bringing that down, bring some, I think some of this inflationary pressure down. And I think that’s probably why we were seeing the NASDAQ do better, because, again, less inflationary pressure, the growth stocks have a better chance.
As far as that goes, I also think the NASDAQ’s doing better just because it hasn’t done well for quite a while, and people come in and bottomfish, and what have you to. I still think the big gains are going to come off at this value side. And we’ll see how that plays out. But fascinating day, fascinating timeframe, as usual, I don’t see anything in here to be concerned with. The market has been kind of soft for a little bit here. But it really, if you look at the underpinnings of what’s happening, it’s really just kind of a rotation out of some of these bigger growth names and into some of these more value stocks. And so sometimes that reflects negatively in those indexes, like we saw yesterday, even though our portfolios were up even though those indexes were down, and that’s because these big companies that are the bigger part of those indexes, were struggling, but a lot of these value plays that we’ve got in the reopening stocks are doing okay, so.Look forward to seeing what’s going to happen tomorrow, and we’ll talk to you then. Thank you very much.