U.S. stocks are set for a higher open on Monday following the Senate’s approval of an amended version of the H.R. 1 Tax Cuts and Jobs Act over the week-end that includes the largest corporate tax cut in history and lowering the number of tax brackets for American individuals while increasing the standard deduction.
The Republican inspired Tax Cuts and Jobs Act is based on a Republican “trickle down economics” model that is estimated to increase U.S. GDP by 0.8 percent over the next 10 years, according to November dynamic score of the bill from the Joint Committee on Taxation (JCT) that works closely with the Congressional Budget Office (CBO) on tax policy issues.
The cost of the Tax Cuts and Jobs Act is over $ 1 trillion and includes a repeal of the individual mandate from the Affordable Care Act, requiring all Americans to purchase health insurance.
The Week Ahead
Investors will be paying close attention to U.S. jobs data this week that is due on Wednesday with an ADP private sector November jobs report and a Friday non-farm payroll report from the U.S. Labor Department for November.
Expectations remain high that the U.S. Federal Reserve will vote to increase the federal funds interest rate by .25 basis points to 1.25- 1.50 percent at the conclusion of their 2 day December monetary policy meeting that wraps up next week on December 13th.
The Fed’s December monetary policy meeting includes a press conference and update with their economic projections.
According to CME’s FedWatch tool, the probability of a .25 basis point rate hike with the federal funds currently stands at 90.2 percent.
Some of the other U.S. economic data this week includes Factory Orders (Oct) due on Monday, and PMI, ISM- non-manufacturing (Nov.) due on Tuesday.
Consumer sentiment (Dec.) is due on Friday along with Wholesale Trade (Oct.)
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