Well like voters, investors have been divided too on the fact that how Hilary Clinton or Donald Trump will do for the stock markets. If you see the presidential debates, you may get short synopsis on it.
To understand the impact on stocks, you need to read the facts. I will present the facts and then my opinions.
What Trump proposes if he wins. –
- Trump proposed to cut 47% tax for the top 1%.
- The Trump Plan will increase the standard deduction for joint filers to $30,000 for Individual Income Tax.
- The Trump Plan will lower the business tax rate from 35 percent to 15 percent, and eliminate the corporate alternative minimum tax.
- It will provide a deemed repatriation of corporate profits held offshore at a one-time tax rate of 10 percent.
Sounds like I’ll be voting for Trump.
If tax cuts get implemented in great a country with $17.8 trillion debt, well, it will be disaster. It will start an inflation. The Tax Foundation determined that, on average, taxpayers will receive a tax cut of $1,818 under the Trump Plan, but a tax increase of $176 under the Clinton plan. [Tax Foundation, Sept. 23, 2016].
Trump’s latest proposals would cut taxes by $6.2 trillion over the next decade, with 47% of all cuts in 2017 going to the top 1%. Clinton’s plans, by contrast, would raise taxes by a net $1.4 trillion over a decade, with 92% of the increase in 2017 extracted from the 1%.
But Hilary’s increase of tax is also sounding disaster for America. But we do not care much anyone apart from Dalal Street.
But actually I think Hillary’s event combined with her polices is a non-event but the market will gain in the fact that – ‘Donald Trump didn’t win’.
Actually many American thinks neither Clinton nor Republican Donald Trump can lead the America. The other thing that Donald Trump is doing is killing the Obamacare.
The tax benefits combined with Obamacare specially made him popular even though he is accounting lots of nonsense lately.
Trump is also talking about making hell imported products and services which means it will blow Indian IT stocks. [Personal Opinion – I see it otherwise in case of short term gains, I bought NIFTY IT today on my opinion when I got this following news. I think IT stocks will gain 2–3% if he wins short term]
A nationwide CBS/New York Times survey showed Clinton’s lead shrinking to three points, at 45 per cent against Trump’s 42 per cent, a sign the bombastic mogul is winning over once-wary Republican voters.
But his stance on Indian Outsourcing companies is not at all good at the moment being. So for long term, it will directly affect the revenue. So sell IT stocks if you have any.
Here’re facts on Clinton –
- Unlike Trump who has a fixed 15-point agenda, Hillary has divided her agenda into 41 issues. And unlike Trump, Clinton’s agenda has a more socialist tinge to it.
- Clinton has promised to crack down on companies that make profits in the U.S and shift profits abroad to avoid paying domestic taxes.
- Her plan involves cutting America’s oil consumption by a third by investing more in solar power
NIFTY is likely to boost by Hillary’s win and if such happens we can earn good from NIFTY options. Market has already appreciated Clinton’s win.
But the shortest term target for the next week will be NIFTY options. Anyways it will fall. Trump win, which is likely to happen will make the fall steeper. As well as I think Bajaj Finserv will get bear candles as they are slightly overvalued to me and technicals confirm this strongly. I am just waiting for a lagging indicator confirmation.