Stocks in the U.S. followed up a rally on Monday with another big day on Tuesday, as the Nasdaq closed above 6,000 for the first time and the Dow briefly traded above 21,000 before close just below this level.
After not doing much for weeks, stocks have opened this week with two huge rallies, and year-to-date the Dow and S&P 500 are now up more than 6% while the Nasdaq is up almost 11%.
Elsewhere in markets on Tuesday, we got a disappointing reading on consumer confidence in April, while housing data came in stronger than expected.
Border adjustments, abandoned
President Donald Trump is set to unveil a major overhaul of the U.S. tax code on Wednesday.
And what will be missing is a controversial border-adjustment tax that would incentivize exports and tax imports, initially a key provision of the House Republican tax plan upon which many expected Trump to draft his own overhaul.
According the a report from The New York Times published Tuesday afternoon, a border-adjustment tax will not be part of the plan announced Wednesday, and more significantly noted that Republicans in Congress appear more open to a tax plan that adds to the deficit.
The border-adjustment tax was a key part of keeping a plan deficit neutral.
As we wrote on Monday, during the campaign Trump often sounded more like Democratic outsider Bernie Sanders than he did any of the Republican opponents he found himself running against.
Healthcare reform, the first legislative issue the administration sought to tackle with the House and Senate, ended up flopping as divides between establishment Republicans and the Tea Party turned were never bridged. But if tax reform does not adhere to the kind of strict revenue neutral criteria one might expect from both the Tea Party and establishment members of the Republican party, then we will know that the more moderate Trump some expected to eventually emerge is asserting himself.
As the Times notes, tax changes that reduce tax revenue must expire after 10 years if passed under budget reconciliation, and many Republicans viewed their current hold on both the legislative and executive branches of government as a chance to make a lasting, rather than fleeting, impact on the U.S. tax code.
We’ll see what Wednesday brings.
Myles Udland is a writer at Yahoo Finance. Follow him on Twitter @MylesUdland
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