Stocks, Dollar, Yields Rally On Mnuchin Tax Cut Comments

Tyler Durden's picture

In a day full of upside catalyst for the reflation trade including the strong TIPS auction, the speculation that the Obamacare repeal effort is back on track, and perhaps best of all the absence of hard data (today's Philly Fed "soft data" was, well, quite soft), the dollar, the S&P and Treasury yields all rose, after Treasury Secretary Steven Mnuchin said that "we are close to bring forward major tax reform", refuting speculation that it may be delayed into 2018.

In kneejerk reaction to the Mnuchin seemingly confident comments, the Bloomberg dollar index, BBDXY, erased its intraday drop to trade little changed while the USDJPY pressed to new session highs.

Speaking at a Institute of International Finance event in Washington, Mnuchin said that the Trump administration’s priority is creating growth in U.S. economy, international goal is for “fair and balanced” trade.

He noted that two main ways to create economic growth are tax reform and regulatory relief. He added that regulatory reform aims to ensure banks can lend and taxpayers aren’t at risk.

Regarding tax reform, Mnuchin said that the objective is making business taxes competitive and bringing back trillions of dollars to invest: "We hope this won’t take until the end of the year, it will be sweeping."

Mnuchin also said that “the tax plan will pay for itself” with growth and the admininstration fundamentally believes in dynamic scoring, although he did not explain just how that would happen aside to note that some cuts in tax rates to be offset with less deductions.

He also said that the administration is looking at simpler tax code, with fewer tax brackets and less deductions concluding that some aspects of border-adjusted tax we like, some we dislike, and finally - in what may be the final dagger in the heart of the BAT - said he remains concerned about border tax impact on currency. Which, incidentally, was the weakest point in Mnuchin's comments as it is very likely that members of Congress, and especially Paul Ryan, will have different plans on tax reform.

But perhaps the most interesting comment from Mnuchin was that he is confident the nation’s debt ceiling will be raised and hopeful it happens before summer, and that the US will keep its AAA credit rating. We assume this excludes S&P's infamous "less than AAA" rating...

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junction's picture

OT: For an example of how really corrupt New York City is, and how incompetent and sniveling New York reporters are, the reporters who also cover Wall Street, look no further than the Hudson Yards IRT subway stop on 34th Street in Manhattan

For over 100 years, from 1904 to 2015, the IRT 7 train’s first stop in Manhattan was at Times Square and 42nd Street.  In 2015, the Hudson Yards stop at 34th Street became  the new first stop in Manhattan, a rail spur built with over $2.5 billion in taxpayer funds solely for the benefit of the Related Company.  

For that money, city taxpayers got a subway station whose official ridership between September 13 and December 31, 2015, was 692,165, making it the 392nd busiest station in the city out of 425 total stations. In contrast, wikipedia states that Times Square–42nd Street/Port Authority Bus Terminal is a New York City subway station complex located under Times Square and the Port Authority Bus Terminal, at the intersection of 42nd StreetSeventh and Eighth Avenues, and Broadway in Midtown Manhattan is the busiest station complex in the system, serving 66,359,208 passengers in 2015.  Almost a hundred times more, yet then Mayor Bloomberg and U.S. Senator Schumer pushed for giving the Hudson Yards station terminus status for the 7th Avenue IRT line.  Why?

Stephen Ross, who runs Related Company, bought off New York’s corrupt politicians to get access to city taxes to develop his Hudson Yards complex on the west side of Manhattan.  Everyone got on board, including the Metropolitan Transportation Authority, arguably the most corrupt New York State agency ever.  Just look at the MTA’s 2 Broadway building lease, a office building lease that the MTA did not need that made 2 Broadway’s owner $2 billion on a building he bought in 1995 for $20 million some three years before the MTA (at the urging of former U.S. Senator D’Amato) signed a 49 year lease for the building.  Oh yeah, the MTA also spent $845 million to upgrade 2 Broadway for Tamir Sapir, the building owner, a former cab driver.    

http://mtamoneythrownaway.com/story/real-estate-craziness-2-broadway-sto...

New York City politicians approved the spending of billions of taxpayer dollars to help out insiders with political connections.  Every person who pays for a ride on the subway gets ripped off by this wastrel spending practices.  Yet, not one reporter from a mainstream news source in New York City has the integrity to report in detail on why the MTA moved the terminus of the IRT #7 subway line to Hudson Yards.  That new station is already falling apart, $2.5 billion doesn’t even now buy you a station that has good waterproofing. 

http://ny.curbed.com/2016/3/22/11283152/hudson-yards-subway-leak-problem...

 

 

 

Deathrips's picture

Heres a tip. Cutting taxes and increasing public national debt is a wash.

Too bad they will add more debt than the tax they cut.

 

RIPS

FrozenGoodz's picture

Sell the rumor ... if they're anywhere remotely similar to how 'close' they were on obamacare, this has no shot at passing ... border tax - gtfo

auricle's picture

Mnuchin is out working on his 'jawboning' technique. Not bad, needs more conviction. 

Ring_Of_Fire's picture

This has to be the dumbest market in history. Big sell off is near..

Raffie's picture

Aren't they a rival of Top Ramen?

So hope Top Ramen gets a tax break too.

2_legs_bahhhhhd's picture

It's a wash alright ....the establishment pays less tax, and the taxpayer gets taken to the cleaners.

NugginFuts's picture

You could have started with "OT" before wasting my time. 

Anon2017's picture

Subway orruption is not just confined to New York City. Google the Shepppard Avenue subway line in Toronto. 

Yen Cross's picture

   Moar smoke and mirrors BS.

FinanceNewb's picture

im surprised that gold and silver is not plunging... but then again i am a newb

Silver Savior's picture

I think people are starting to find out how important real supply is vs paper garbage metal contracts but many many more still have to figure it out.

BigFatUglyBubble's picture

Mnuchin said that the objective is making business taxes competitive and bringing back trillions of dollars to invest:

into stock buy-backs

NugginFuts's picture

Make Buy-backs Great Again!!!!

Seasmoke's picture

Aren't there a million more houses for this jackass to foreclose ??? I fucking hate him.

buzzsaw99's picture

the trump team sure does yak a lot.

Ricki13th's picture

This guy is a hack. Trump said there can't be comprehensive tax reform without getting rid of Obummercare. But yet according to Mnuchin, it doesn't matter. I bet him and Cohn wrote it along with Goldman Sachs.

NugginFuts's picture

Or here's a theory: start a war, cut all funding to State (cause duh bombs beat diplomacy) and then stimulate the shit out of the war machine stocks. Hell, here's an idea:

TSLA announces electric tank for DoD! Self-Driving! Will shoot unicorn dust at NORKs! Investors rave! 

Lizardking's picture

Taking a page from Elon Musk, we are going to do this, that, and just keep announcing it over and over again even if it takes years longer to accomplish than your original promise. It's a headline market so why not, every CEO should be talking about what they plan on doing and how huge it's going to be even if it's a pipe dream. Market will jump all over it, it doesn't even matter if you lose money doing it as long as your revenue increases.

NoDebt's picture

Tax cuts for 'ol NoDebt?  Dare I hope?  No, I do not.  This sounds like it's only for businesses, not individuals.  If it happens at all. 

But wait!  If it does, ol' NoDebt's got the tried-and-true C-corp/S-corp/Personal tax juggling game that he's been playing for years.  Maybe a time to restructure some stuff and I could make this work for me after all.  Hmmmmm.

polo007's picture

http://www.cnbc.com/2017/04/20/treasurys-mnuchin-were-pretty-close-to-bringing-forward-major-tax-reform.html
 
The Trump administration is close to bringing forward "major tax reform," Treasury Secretary Steven Mnuchin said Thursday, days after he tempered expectations for how quickly it will pass.
 
Mnuchin, who this week backed off of his earlier goal of passing tax reform by August, said the White House will unveil a plan "very soon." However, the Trump administration previously set several deadlines for releasing its tax plan that it did not meet.
 
In terms of timing, he said he hoped passing a tax overhaul will not "take 'til the end of the year."
 
Mnuchin spoke at the Institute of International Finance Washington Policy Summit, where White House chief economic advisor Gary Cohn was set to appear later Thursday.
 
In a Financial Times interview published Monday, Mnuchin said getting a bill to President Donald Trump's desk before August is "highly aggressive to not realistic at this point." He said in February that he wanted to see "very significant" tax reform passed by Congress' August recess.
 
The business community has hoped Republicans can move quickly on overhauling the American tax system, a prospect that partly fueled stock market gains in the months following Trump's election. However, political realities have tempered expectations for changes to the tax system.
 
Republicans attempted to pass legislation to replace the Affordable Care Act before moving to a tax reform bill. That effort failed late last month, and Mnuchin said the setback contributed to his assessment that passing a tax overhaul by August could be difficult.
 
............
 
Republicans have refocused on resurrecting the effort to repeal the ACA, better known as Obamacare, as they get set to return from a recess next week. House GOP leaders are trying to balance the concerns of the both the party's conservative and moderate wings as they try to follow through on a major campaign pledge.
 
Mnuchin said Thursday that "whether health care gets done or health care doesn't get done, we're going to get tax reform done."

Silver Savior's picture

All I been thinking about today is how I am going to buy more silver. Oh wait that's everyday. 

Snaffew's picture

wow...the bullshit keeps coming and the dicks keep buying

hotrod's picture

ABSOLUTE CRAP.  Timing changes with the wind.  Tax reform so simple HR Block gonna bankrupt. 

TabakLover's picture

How much you wanna bet "Munch-nuts" called his Squid buddies yesterday and told them "Hey, I'd load up on SPY calls about 3:59 today"    Fucking crooks.

pebblewriter's picture

"the tax plan will pay for itself"

Haven't we heard that one before?  Oh, right, every single time since taxes were first levied.

silverer's picture

So if Mnuchin says it going to rain, bad day in the markets?

polo007's picture

http://www.marketwatch.com/story/republicans-eye-new-obamacare-repeal-attempt-as-early-as-wednesday-report-says-2017-04-20
 
Trump says he sees ‘good chance’ of health-bill vote next week or soon after
 
Published: Apr 20, 2017 4:45 p.m. ET
 
Senior Republican aide says there’s no text yet
 
President Donald Trump said Thursday he sees a good chance of a vote on a new Obamacare repeal-and-replace measure next week or soon after, telling reporters a plan is getting “better and better.”
 
Earlier, a report said the White House was eyeing Wednesday as a target date for a vote, but a Republican aide on Capitol Hill didn’t commit to that date.
 
“This is a great bill,” Trump said at a news conference with Italian Prime Minister Paolo Gentiloni. “This is a great plan. It’s evolving. We have a good chance of getting it soon, whether it’s next week or shortly thereafter.”
 
The Washington Post’s Robert Costa tweeted that a top White House official said aides to Trump and congressional Republicans will circulate revised language on a health-care bill Thursday evening. The Wednesday target date could change, the official told Costa.
 
Trump and Republicans are eager to take another crack at replacing President Barack Obama’s health-care law, following the implosion of an earlier attempt, in March.
 
Politico reported Thursday morning that an emerging deal proposes giving states more flexibility to opt out of major Obamacare provisions while preserving protections like the ban on discriminating against people with preexisting conditions.
 
A senior Republican aide told MarketWatch the question is whether a bill can get 216 votes in the House, “and the answer isn’t clear at this time.” The aide said there is no legislative text and no agreement to see how many members would vote for it.
 
A White House spokesperson declined to comment.
 
Lawmakers return to Washington next week from a spring recess, and taking a vote on health care would be just one item on an already crowded schedule. The government is funded through April 28, and Congress must pass a bill before then or bring on a partial shutdown.
 
Trump also said he wanted to avoid a shutdown. “I think we want to keep the government open, don’t you agree?” he said in response to a reporter’s question.

allamerican's picture

bigcorp tax cuts commin, fuck you later..

scubba steve might make it go..