Has the $1.5 Trillion US Tax Cut Package Failed To Boost Business Spending So Far?
U.S. President Donald Trump’s tax cut package is apparently yet to produce a substantial boost in business spending, as suggested by a recent survey result.
According to the National Association of Business Economics' (NABE) quarterly business conditions poll published on Monday, 84% of respondents indicated that corporate tax cuts did not lead them to change plans. That percentage is even bigger compared to the 81% in the survey published in October.
The $1.5 trillion cut tax package – which included a reduction of corporate tax rate to 21% from 35% - is the largest U.S. tax code overhaul in more than three decades. It was expected to free up more cash for companies to increase employment and/or expand capital spending. But that may not have fully translated into reality as yet, according to the survey.
The survey's gauge of capital spending fell in January to its lowest level since July 2017. Projections on capital spending for the next three months also dropped. There was a modest improvement in employment growth in the fourth quarter of 2018, compared to the third quarter. The measure for projected employment over the next three months declined to 25 in January, from 29 in October.
However, looking at the goods producing sector in isolation, the tax cut did seem to have an impact. Half of the respondents from that sector reported increased investments at their companies, while 20% claimed to have reallocated investments and employment to the U.S. from abroad.
SPY in downward trend: price may drop because broke its higher Bollinger Band on October 11, 2024
SPY broke above its upper Bollinger Band on October 11, 2024. This could be a sign that the stock is set to drop as the stock moves back below the upper band and toward the middle band. You may want to consider selling the stock or exploring put options. The A.I.dvisor looked at 38 similar instances where the stock broke above the upper band. In of the 38 cases the stock fell afterwards. This puts the odds of success at .
Technical Analysis (Indicators)
Bearish Trend Analysis
The 10-day RSI Indicator for SPY moved out of overbought territory on October 15, 2024. This could be a bearish sign for the stock. Traders may want to consider selling the stock or buying put options. Tickeron's A.I.dvisor looked at 49 similar instances where the indicator moved out of overbought territory. In of the 49 cases, the stock moved lower in the following days. This puts the odds of a move lower at .
The Stochastic Oscillator may be shifting from an upward trend to a downward trend. In of 68 cases where SPY's Stochastic Oscillator exited the overbought zone, the price fell further within the following month. The odds of a continued downward trend are .
The Momentum Indicator moved below the 0 level on October 25, 2024. You may want to consider selling the stock, shorting the stock, or exploring put options on SPY as a result. In of 65 cases where the Momentum Indicator fell below 0, the stock fell further within the subsequent month. The odds of a continued downward trend are .
The Moving Average Convergence Divergence Histogram (MACD) for SPY turned negative on October 23, 2024. This could be a sign that the stock is set to turn lower in the coming weeks. Traders may want to sell the stock or buy put options. Tickeron's A.I.dvisor looked at 51 similar instances when the indicator turned negative. In of the 51 cases the stock turned lower in the days that followed. This puts the odds of success at .
Following a 3-day decline, the stock is projected to fall further. Considering past instances where SPY declined for three days, the price rose further in of 62 cases within the following month. The odds of a continued downward trend are .
Bullish Trend Analysis
Following a 3-day Advance, the price is estimated to grow further. Considering data from situations where SPY advanced for three days, in of 374 cases, the price rose further within the following month. The odds of a continued upward trend are .
The Aroon Indicator entered an Uptrend today. In of 455 cases where SPY Aroon's Indicator entered an Uptrend, the price rose further within the following month. The odds of a continued Uptrend are .
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