Hello and have a good Friday. An expected US tax proposal shakes the markets, Germany could relax its vaccination schedule and first-rate profits. Here is what is moving the markets.
US President Joe Biden will propose nearly doubling the capital gains tax rate for high net worth individuals to 39.6% to help pay for a slew of social spending, according to people familiar with the proposal. Biden campaigned to equalize capital gains and income tax rates for rich people, saying it was unfair that many of them pay lower rates than middle-class workers. He is expected to release the proposal next week as part of tax increases to fund social spending in the upcoming “US Plan for Families.” The S&P 500 Index slipped the most in more than a month on the news, closing 0.9% lower, while the Nasdaq fell 1.2%. European futures contracts also declined.
Pull the stops
Germany could lift its age bracket system and make Covid vaccines available to all adults from the end of May, Bild reported yesterday, just as a prime minister said the country would buy 30 million of Russia’s Sputnik V projectiles. Meanwhile, three German states flouted federal guidelines and made AstraZeneca shot available to people under the age of 60 on a voluntary basis. Well ahead of Germany in its vaccination effort, England no longer recorded Covid as its leading cause of death in March, the Telegraph reported citing ONS data. The UK is also instituting a quarantine requirement for travelers from India, in response to peak cases caused by a new variant found on the subcontinent.
Salvatore Ferragamo and Burberry luxury stocks at Richemont and Moncler could be active after luxury juggernaut LVMH raised its stake in Italian shoemaker Tod’s to 10%, a move that should fuel speculation about other mergers and acquisitions to come. LVMH bought back 2.25 million shares from Tod’s CEO Diego Della Valle, representing a 6.8% stake, at 33.10 euros ($ 39.81) each, and the owner of Louis Vuitton already held 3 , 2% of Tod’s. Tod’s shares have climbed more than 20% after appointing Italian fashion influencer and entrepreneur Chiara Ferragni as director this month, a development welcomed by some analysts as Tod’s looks to revamp its brand and attract young clients.
Winning streak for German automakers and their investors appears to continue, with Daimler increasing the margin forecast for its core Mercedes-Benz Cars & Vans division this morning. Still, he warned that a continuing shortage of microchips had affected deliveries in the first quarter. Mercedes this month ramped up its electric car rollout with the new flagship EQS sedan, the S-Class’s battery sister, as mainstream automakers broaden their attack on Tesla’s lead. The share of the Stuttgart-based automaker has risen 28% so far this year, compared to 19% for Bavarian rival BMW and 52% for Volkswagen, which electrified investors in March with the intention of competing with Tesla. in the electric vehicle market.
To come up…
European stocks fall after a US proposal to raise taxes on frightened wealthy markets. The news also sent Bitcoin below $ 50,000 for the first time since early March. Today, the Bank of Russia holds its rate decision and the UK reports retail sales, with economists forecasting a slowdown in March. Daimler aside, Remy Cointreau and LafargeHolcim are earnings highlights in Europe today, while the US will see Honeywell and American Express on a quieter day as the weekend approaches. Finally, UEFA is preparing to take a decision today on whether Bilbao, Dublin and Munich will host Euro 2020 league matches – potentially offering more matches to Wembley.
What we read
This is what caught our attention over the past 24 hours.
And finally, here’s what interests Cormac Mullen this morning
So far, the latest wave of the virus has failed to increase stocks at the outbreak, even in Asia, where most of the new cases are concentrated. A basket of stocks compiled by Bloomberg, comprising online games, internet services and healthcare names, has underperformed the MSCI Asia Pacific index by about 5 percentage points since late February, despite an increase infections in countries like India and Japan. An equivalent gauge from Solactive for Europe fell behind the Stoxx 600 by around 2 percentage points over the same period, while that of the United States underperformed by around 10 points. With more advanced vaccinations in Europe and the United States, the underperformance of the stay at home is understandable, but this is not the case in Asia where vaccines are well behind in other regions. The percentage of the population fully vaccinated was just 1.4% in India, 0.6% in Japan and 2.4% in Indonesia on Thursday, according to data compiled by Bloomberg. The outbreak of the virus has certainly weighed on Asian stocks which have lagged behind their global peers in recent weeks. But the lack of a return to home-based trades suggests that investors see it as a short-lived phenomenon.
Cormac Mullen is a reporter and editor for Bloomberg News in Tokyo.
Like Bloomberg’s Five Things? Subscribe for unlimited access trusted, data-driven journalism in 120 countries around the world and benefit from expert analysis through exclusive daily newsletters, Bloomberg Open and The Bloomberg Close.
– With the help of Albertina Torsoli and Gearoid Reidy