To fund his $2 trillion infrastructure plan, President Joe Biden has proposed to raise the corporate tax to 28%. According to the New York Times, corporations will be required to pay fifteen years of taxes at the 28% rate. This is an increase from President Trump’s previous tax cuts, which decreased the corporate tax from 35% to 21%. Not all companies will be taxed the same amount, however.
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The US economy is booming, adding nearly 1 million jobs last month, bringing the unemployment rate down to 6%. Goldman Sachs has bumped up its estimate for the US’s 2021 GDP growth to 10%. If true, the US would replace China as the world’s primary driver of economic growth this year.
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With its growing exposure to the rest of the world, China has established itself as an important supplier, provider, and market of capital. According to the McKinsey Global Institute, which is ranked the top think-tank in the world for private sectors, China accounts for 35 percent of global manufacturing output.
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Janet Yellen’s G-20 letter served as an urgent call for a multilateral effort to tackle key issues. The primary focus was to call on countries to act quickly on COVID-19, stating that a global vaccination effort is the strongest stimulus the global economy could receive. She also suggested that the IMF allocate SDRs to enhance liquidity for low-income countries.
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Major indexes faltered this week while Treasury Yields soared. The 10Y Treasury yield has passed 1.3%. In theory, these two should move in the same direction. Treasury yields rise because investors are rotating out of them and into riskier assets like equities. This is known as risk-on.
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The coronavirus pandemic has debilitated the US economy in many different aspects. From the stock market to the unemployment rate, no one can deny that this virus has hit every sector of the American economy.
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Recently, Regal Cinemas, the second-largest theater chain in the country, chose to close all their theaters in the US indefinitely due to rising COVID-19 cases. This closure will affect 45,000 jobs, with 40,000 of them in the US. Movie theaters run off of foot traffic, and with the rise in online streaming services, they are already struggling.
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On Friday, October 9th, the Broadway League announced that the Broadway theater industry would remain shut down until May 31, 2021. This would bring the shutdown length to 14 months since the start of the pandemic.
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By 2035, California will ban the sales of gas-powered cars statewide. This executive order was signed by Californian Governor Gavin Newsom on Wednesday, September 23rd as an effort to curb the ongoing climate crisis.
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It is fitting that in a year as uncharacteristic as 2020, the stock market has experienced unprecedented volatility. When Wall Street opened its doors on January 2nd, no broker could have predicted that the Dow Jones would plummet 10,000 points over the course of three months, a historic meltdown that culminated in a 37% drop from the all-time high of 29,569.58 achieved in February. Such a nosedive was largely because of the Dow’s performance on March 12th, a day that investors refer to as “Black Thursday” due to the market falling 2,300 points.
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