Delta virus + Corporate Tax Wall Street Warns

After U.S. stocks hit new highs successively this year, Wall Street investment banks and experts warned that U.S. stocks will fall back this fall as the uncertainty of the epidemic and Biden’s tax increase rises.

“CNN” reported that the S&P 500 index closed for 5 consecutive trading days, the longest consecutive decline since February. Although the decline was not large, as Wall Street assessed the impact of the Delta virus and the potential increase in corporate tax on the economy, The uncertainty about the state of the market’s rebound is clearly rising.

The Standard & Poor’s rebounded on Monday after falling for five consecutive losses, rising 10.15 points or 0.23% to close at 4,468.73 points.

Ryan Detrick, chief market strategist at LPL Financial, recently told clients: “Considering the market’s expected pricing, we believe that the pace of the S&P 500 index may slow down.” According to reports, the S&P 500 index has opened 18.7% this year. Breaking new highs for 50 consecutive times.

After the apparent slowdown in the US employment report in August, Goldman Sachs lowered its forecast for US economic growth in 2021. The Delta virus is also one of the hidden worries affecting consumers’ shopping. But Goldman Sachs pointed out that compared to disappointing economic growth, tax changes are the “main risk” for US stocks by the end of the year.

Goldman Sachs estimates that if the U.S. corporate tax rate is increased from 21% to 25% and higher taxes are imposed on foreign income, S&P 500 earnings may decrease by 5%, which will also affect corporate profits in 2022.

Deutsche Bank released a monthly survey of more than 550 investors on Monday, showing that 58% of respondents believe that the stock market will fall by 5% to 10% before the end of the year, and another 10% expect a greater correction . Respondents believe that the fluctuating virus is the biggest risk to market stability and outweighs concerns about high inflation.

 

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