- Win McNamee / Staff
Stocks climbed late in the afternoon, with the Dow closing at a new high. Earlier, Trump announced his decision for Jerome Powell to replace Janet Yellen as Fed Chair and the GOP finally unveiled its massive tax plan.
First up, the scoreboard:
- Dow: 23,516.26, +81.25, (+0.35%) S&P 500: 2,579.85, +0.49, (+0.02%) Nasdaq: 6,714.94, -1.59, (-0.02%)
1. Trump chooses Jerome Powell to replace Janet Yellen as Fed Chair. Powell is seen as a relatively safe, Wall Street-friendly choice at a crucial time for the central bank. The Fed has begun the process of raising interest rates from post-recession lows and is unwinding its massive asset-buying program – a response to the financial crisis a decade ago.
2. House GOP leaders on Thursday unveiled the “Tax Cuts and Jobs Act,” which includes a broad set of proposed changes to the corporate and individual tax systems.
- House Ways and Means Committee Chair Kevin Brady, the author of the tax bill, said the bill would add $1.51 trillion to the federal deficit over the next 10 years. The Senate is set to use the process known as budget reconciliation to move the bill and avoid a Democratic filibuster.Brady, House Speaker Paul Ryan, and other House GOP leaders touted the bill in a press conference on Thursday and argued it would save the average family of four $1,182 a year on their taxes. Here’s how your tax bracket may change under the new tax plan, in one chart.
3. The tax plan has the real-estate industry in a panic and talking about housing recessions. The plan would cap the mortgage-interest deduction – which allows homeowners to subtract interest payments from their taxable income – on new homes at $500,000. This could dampen the benefit of the deduction outside of the most expensive housing markets and may lower home values. “We’re worried about a national housing recession,” Jerry Howard, the CEO of the National Association of Home Builders, a lobbying group based in DC, told Business Insider.
4. A part of the new tax plan will be tough sell for Republicans in New Jersey, New York, and California. The bill proposes the elimination of the state and local tax (SALT) deduction, which is a benefit that allows people to deduct those taxes from their federal bill. This is a hangup for Republican representatives in districts that benefit from the deduction.
5. The companies most likely to benefit from the tax plan surged. These companies can be broken into two main groups: (1) Those who pay the most taxes, and would, therefore, benefit most from a cut, and (2) those with the most cash stashed overseas and would see a huge windfall from a proposed one-time repatriation tax holiday.
Diving deeper into the new tax bill:
- How your take-home pay could change if the new tax plan is passed. Realtors are worried tha the GOP’s tax plan could slump the housing market. What the GOP tax plan means for your retirement savings. The group that represents America’s small business slams the new GOP tax bill. The GOP’s tax plan could make it harder to get tax deductions for medical expenses. Some colleges have billion-dollar endowments – and now the GOP wants to tax them for it. The tax plan could lead to billions of dollars flooding back to the US. And here are the companies that are set to benefit the most from that. The investment chief at the world’s first tax-reform ETF tells us how to trade Trump’s plan. The House GOP bowed to Trump’s demands for now, proposing now changes to 401(k)s or retirement savings in the tax bill. One part of Trump’s new tax plan could make buying a home even harder for millennials. The “double standard deduction” in the GOP tax plan is a lie, writes Josh Barro.
In other market news: