FTG Blog - Hidden Pothole for Stock Market May Lie in Republican Tax Reform Plan

Hidden Pothole for Stock Market May Lie in Republican Tax Reform Plan

Tax reform may not be the unalloyed good that stock market investors seem to think it is.

Or so say tax policy wonks in Washington. In a complicated argument, they contend that a provision in the Republican tax plan that’s designed to speed up economic growth paradoxically could put downward pressure on equity prices.

The relevant proposal would allow companies to immediately write off for tax purposes all their spending on machinery, computers and other capital investments. The aim: To coax firms into making more productivity-boosting outlays. It would be a big change from the current tax code, which requires that some items be written off gradually over time.

The shift to so-called full expensing would effectively enhance the value of companies with big future capital spending plans relative to those that already sunk a lot into their business. And that in turn could prompt investors to reassess how much they’re willing to pay to own shares of established companies listed on the stock exchanges, experts in the tax field say.

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FTG Blog - British government cuts stake in Lloyds to below 3 percent

British government cuts stake in Lloyds to below 3 percent

The British government has reduced its stake in Lloyds Banking Group (LLOY.L) to just below 3 percent, putting the lender on track to be back in private ownership within the next few months.

UK Financial Investments Limited (UKFI), which manages the government’s stake, resumed share sales in October, having halted them for almost a year due to market turbulence.

UKFI said it had reduced its stake by about 1 percent to 2.95 percent in an announcement on Wednesday.

The government was left with a 43 percent stake in Lloyds after a 20.5 billion pound ($25.75 billion) taxpayer-funded bailout during the 2007-09 financial crisis.

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FTG Blog - Toshiba misses third-quarter deadline; considers strategic options for Westinghouse

Toshiba misses third-quarter deadline; considers strategic options for Westinghouse

Toshiba misses third-quarter deadline; considers strategic options for Westinghouse

Japan’s Toshiba Corp (6502.T) failed to submit audited third-quarter earnings for a second time on Tuesday, gaining a one month extension as its expands a probe into problems at its U.S. nuclear unit Westinghouse.

With its financial woes only deepening, Toshiba said it would speed up looking at whether to sell a majority of Westinghouse even as it sought to reassure investors it could have a future without the unit or its prized memory chip business which has been put up for sale.

It will “aggressively consider strategic options” for Westinghouse, it said in a statement, although it did not mention a potential Chapter 11 filing for the U.S. nuclear firm. Sources have said that bankruptcy lawyers have been hired as an exploratory step.

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FTG Blog - 5 Things to Watch in the February Jobs Report

5 Things to Watch in the February Jobs Report

The Labour Department on Friday releases its February jobs report—the last major economic data before next week’s Federal Reserve policy meeting, which could see officials, raise short-term interest rates for just the third time since the financial crisis. Economists surveyed by The Wall Street Journal expect the report will show nonfarm payrolls rose a seasonally adjusted 197,000 in February and the unemployment rate ticked down to 4.7%.

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