https://www.lightspeed.com/active-trading-blog/what-traders-can-expect-after-earnings-season/ The third-quarter earnings season is off to a very strong start, and it seems at this point that traders concerned about a disappointing quarter can breathe a sigh of relief. Assuming the remainder of earnings season continues to go smoothly, the S&P 500 is well-positioned to potentially finish 2021 at new all-time highs. But just because the final earnings season of the year is lining up to be a good one doesn’t necessarily mean the last 2 months of the year will be smooth sailing for the stock market. Here are 4 catalysts that traders will be watching after earnings season is over. Federal Reserve Tapering The Federal Reserve has indicated it will begin tapering its $120 billion in monthly asset purchases soon. A recent CNBC survey found that investors are expecting the Fed to officially announce its tapering plan in November and begin dialing back its bond buying starting in December. If the Fed announces a more aggressive tapering plan than the market is expecting, it could spook investors. Not only would it suggest that the market will be losing its monthly stimulus faster than expected, investors may see aggressive tapering as a red flag that the Fed believes it will need to raise interest rates to slow down the economy sooner rather than later. Inflation The main reason the Fed may be forced to aggressively taper is persistent inflation. Fed Chairman Jerome Powell has repeatedly said elevated inflation levels are “transitory” as the U.S. economy opens back up fully following the pandemic. However, Powell conceded in September that inflation has been “frustrating” and that inflationary pressures have been “larger and longer-lasting than anticipated.” Supply chain disruptions, labor shortages, and booming consumer demand have contributed to rising inflation. The Fed is expecting that inflation will moderate in 2022. If it does not moderate or if it continues to rise, the stock market could take a hit. COVID-19 U.S. COVID-19 hospitalization and death rates have been improving, but there is still a risk that the onset of winter flu season will bring a spike in COVID-19 cases. In addition, news of any new variants of COVID-19 that have resistance to the current batch of vaccines and boosters would likely rattle the market. If flu season comes and goes without any major negative COVID-19 headlines, it could be a bullish catalyst for the stock market and a sign the combination of vaccinations and natural immunity has finally reduced COVID-19 risk in the U.S. in a significant way. Tax Hikes President Joe Biden has proposed several major changes to tax policy that could be market moving. The biggest change would potentially be his proposal to raise the corporate tax rate from 21% to 28%, which would significantly eat into corporate earnings. Biden is also looking to impose a 15% minimum tax on global pre-tax corporate book income for companies with more than $2 billion in net income. In addition, he has proposed raising the top marginal income tax rate on individuals from 37% to 39.6% and taxing capital gains as ordinary income for taxpayers with an adjusted gross income of more than $1 million. There’s a high likelihood Biden will be forced to compromise on at least some of his tax proposals. But the timing and the details of the tax policy changes will likely have a big impact on the stock market. Active Trading with Lightspeed Lightspeed provides professional traders with all the tools required to help them find success in stock trading, and we have been developing and honing our active trader platform to offer an optimal user experience. With the intuitive interface layouts and institutional quality stock and options scanners, we aim to help traders reach their goals, no matter what their strategy is. We also offer our clients some of the lowest trading fees in the industry. For more information on a professional trading platform with Lightspeed, please call us at 1-888-577-3123, request a demo, or to open an account. Lightspeed Financial Services Group LLC is not affiliated with these third-party market commentators/educators or service providers. Data, information, and material (“content”) are provided for informational and educational purposes only. This content neither is, nor should be construed as an offer, solicitation, or recommendation to buy or sell any securities or contracts. Any investment decisions made by the user through the use of such content is solely based on the users independent analysis taking into consideration your financial circumstances, investment objectives, and risk tolerance. Lightspeed Financial Services Group LLC does not endorse, offer nor recommend any of the services or commentary provided by any of the market commentators/educators or service providers and any information used to execute any trading strategies are solely based on the independent analysis of the user.
%% Good light on the subject. With the the exception of MISS/ #1in overweight,+ NJ, NY, AL, LA, looks like the virus is a nothingburger. I still try to distance 7 or 7.77 feet. WITH the R/ reduced gov Victory in VA, dont think the dems can raise taxes @ all; a possible exception could be a 15 % minimum tax on 2 billion corp?? Politics can be a bit tricky sometimes \\ who would have thought feds would now open up federal property to oil + gas drilling??LOL