S&P 500   3,761.88 (-0.17%)
DOW   30,954.06 (+0.10%)
QQQ   299.64 (-1.47%)
AAPL   118.22 (-1.59%)
MSFT   227.62 (+0.39%)
FB   256.82 (-0.32%)
GOOGL   2,039.71 (+0.28%)
TSLA   560.49 (-9.81%)
AMZN   2,910.14 (-2.26%)
NVDA   475.95 (-3.81%)
BABA   228.77 (-0.75%)
CGC   28.94 (-6.68%)
GE   13.35 (-1.62%)
MU   85.05 (+0.85%)
NIO   34.01 (-13.42%)
AMD   75.65 (-2.70%)
T   29.43 (+1.76%)
F   11.82 (-0.92%)
ACB   8.93 (-9.06%)
DIS   185.05 (-1.58%)
BA   215.65 (-4.03%)
NFLX   503.60 (-1.50%)
BAC   36.34 (-0.44%)
S&P 500   3,761.88 (-0.17%)
DOW   30,954.06 (+0.10%)
QQQ   299.64 (-1.47%)
AAPL   118.22 (-1.59%)
MSFT   227.62 (+0.39%)
FB   256.82 (-0.32%)
GOOGL   2,039.71 (+0.28%)
TSLA   560.49 (-9.81%)
AMZN   2,910.14 (-2.26%)
NVDA   475.95 (-3.81%)
BABA   228.77 (-0.75%)
CGC   28.94 (-6.68%)
GE   13.35 (-1.62%)
MU   85.05 (+0.85%)
NIO   34.01 (-13.42%)
AMD   75.65 (-2.70%)
T   29.43 (+1.76%)
F   11.82 (-0.92%)
ACB   8.93 (-9.06%)
DIS   185.05 (-1.58%)
BA   215.65 (-4.03%)
NFLX   503.60 (-1.50%)
BAC   36.34 (-0.44%)
S&P 500   3,761.88 (-0.17%)
DOW   30,954.06 (+0.10%)
QQQ   299.64 (-1.47%)
AAPL   118.22 (-1.59%)
MSFT   227.62 (+0.39%)
FB   256.82 (-0.32%)
GOOGL   2,039.71 (+0.28%)
TSLA   560.49 (-9.81%)
AMZN   2,910.14 (-2.26%)
NVDA   475.95 (-3.81%)
BABA   228.77 (-0.75%)
CGC   28.94 (-6.68%)
GE   13.35 (-1.62%)
MU   85.05 (+0.85%)
NIO   34.01 (-13.42%)
AMD   75.65 (-2.70%)
T   29.43 (+1.76%)
F   11.82 (-0.92%)
ACB   8.93 (-9.06%)
DIS   185.05 (-1.58%)
BA   215.65 (-4.03%)
NFLX   503.60 (-1.50%)
BAC   36.34 (-0.44%)
S&P 500   3,761.88 (-0.17%)
DOW   30,954.06 (+0.10%)
QQQ   299.64 (-1.47%)
AAPL   118.22 (-1.59%)
MSFT   227.62 (+0.39%)
FB   256.82 (-0.32%)
GOOGL   2,039.71 (+0.28%)
TSLA   560.49 (-9.81%)
AMZN   2,910.14 (-2.26%)
NVDA   475.95 (-3.81%)
BABA   228.77 (-0.75%)
CGC   28.94 (-6.68%)
GE   13.35 (-1.62%)
MU   85.05 (+0.85%)
NIO   34.01 (-13.42%)
AMD   75.65 (-2.70%)
T   29.43 (+1.76%)
F   11.82 (-0.92%)
ACB   8.93 (-9.06%)
DIS   185.05 (-1.58%)
BA   215.65 (-4.03%)
NFLX   503.60 (-1.50%)
BAC   36.34 (-0.44%)
Log in

How the Joe Biden presidency could impact your money

Wednesday, January 20, 2021 | Hal M. Bundrick Of Nerdwallet

As you take a closer look at your financial footing amid the headwinds of a pandemic, it’s an excellent time to examine the possible impact of a Joe Biden presidency on money matters.

The balance of Congress has shifted following the Georgia runoffs, providing possible momentum for President Biden’s agenda.

A new COVID check, taxes, health care — it’s all on the line. Here’s how.

A SHORT FUSE ON ANOTHER ROUND OF STIMULUS CHECKS

Look for another round of pandemic relief shortly after Biden’s inauguration, says Bernard Yaros Jr., an economist with Moody’s Analytics.

“In February, we expect that there’s going to be a COVID-specific relief package,” Yaros says. That measure will likely once again extend unemployment insurance benefits, with enough support for another round of checks issued to Americans, “whether it’s 2K or slightly lower,” he says.

Small businesses are likely to receive more grants and forgivable loans, as well.

“And we’re also thinking, you would probably get some additional funding for rental assistance,” Yaros adds.

MOVING FROM RELIEF TO STIMULUS

With Democrats gaining two seats in the Senate from the Georgia runoffs, there is now a greater possibility of moving from “relief” to “stimulus” mode in late 2021.

“That’s because now that the Democrats have a simple majority in the Senate. They can pass changes to the tax code as well as implement changes in spending,” Yaros says.

Moody’s Analytics economists expect the Biden administration will dedicate increased funding for enhancements to “social safety nets,” possibly including:

— Expanding eligibility for Medicare.

— Retooling Obamacare into Bidencare.

— Rolling out paid sick leave protections.

— Offering universal pre-K for 3- and 4-year-olds.

— Providing some kind of student debt forgiveness.

But on these initiatives, Democrats will “have to pick and choose,” Yaros says.

“Among the more moderate Democrats, they’re not going to want to increase the deficit too much. That’s obviously going to be a limiting factor,” he adds.

And while Vice President Kamala Harris holds the deciding vote in the event of a Senate tie, the 50-50 split between Democrats and Republicans doesn’t constitute filibuster-proof power.

REVERSING TRUMP TAX CUTS

Higher taxes are expected to partially fund the widening of these social safety nets.

Yaros says Biden is likely to succeed in reversing Trump’s tax cuts, raising the corporate income tax rate to 28%, increasing the tax rate for taxable incomes of more than $400,000 and eliminating some tax breaks for those making more than $1 million.

But the tax hikes may be smaller than widely anticipated, says Michael Zezas, head of U.S. public policy research at Morgan Stanley.

“In a Senate where Democrats have the slimmest majority possible, any one Democratic senator effectively has a veto. And when it comes to taxes, we expect many of the Biden administration’s proposed taxes won’t pass muster with Democratic moderates,” Zezas says in an analysis.

“We estimate about $500 billion of tax increases are possible, obviously a smaller number than another potential COVID stimulus round, and also smaller than the $1 trillion-plus spending now in play for each of health care and infrastructure,” Zezas added.

Even if Biden can swing the tax hikes, they aren’t expected to kick in until 2024, Yaros says, “to make sure that there’s no fiscal drag, at all, on the economy in these next couple of years when we’re still digging ourselves out of the pandemic.”

REVISING RETIREMENT PLANS

Joe Biden also has some ideas to reshape employer-sponsored retirement plans.

One of those proposals is to equalize the tax benefit of contributing to a retirement plan so that “higher-income earners aren’t getting more of the benefit than the lower-income workers, that it’s standard across the board,” says Anne Tyler Hall, founder and principal of Hall Benefits Law.

For example, someone in a 37% tax bracket is able to deduct the full amount of a retirement plan contribution; so $37 for every $100 pre-tax contribution. That’s a greater tax benefit than someone in a lower tax bracket, such as 20%, who would receive a $20 deduction for each $100 pre-tax contribution.

The idea proposed by the Biden administration is to offer a tax credit to low- and moderate-income workers, resulting in an equal tax benefit.

Democrats are also pushing for employers to make retirement saving easier for the U.S. workforce.

“Employers who don’t offer retirement plans would be required to allow employees to make contributions to individual retirement accounts, IRAs,” Hall says. “Contributions to the IRAs would come directly from paychecks.”

With the shift of balance in Congress, Hall says such changes may be more likely. Plus, “some of these provisions have bipartisan support,” she adds.

RELATED LINKS:

Georgia Changes the Game https://www.morganstanley.com/ideas/thoughts-on-the-market-zezas

Budgeting 101: How to Budget Money http://bit.ly/nerdwallet-budget-101


7 Semiconductor Stocks Set to Gain From the Chip Shortage

Who knew that something so tiny could create such a big problem? However, that’s the case with the semiconductor industry. Chip manufacturers are facing supply chain disruptions due to the Covid-19 pandemic.

Semiconductors are in high demand for the big tech companies who need the chips to power the servers for their data centers. But they are also needed for much of the technology we take for granted including laptops, tablets, mobile phones, gaming consoles, and automobiles – a sector that seems to be at the root of the current crisis.

Any weekend mechanic knows that even traditional internal combustion cars are heavily reliant on electronics. In fact, electronic parts and components account for 40% of a new, internal combustion vehicle. That’s more than doubled since 2000.

However as it turns out, some manufacturers may have overestimated how soon consumers would be ready for an “all-electric” future. And that meant that they didn’t forecast how much demand there would be for the kind of chips needed to do the mundane, but vital tasks of steering, braking, and even powering windows up and down.

Part of the problem is that U.S. businesses are heavily reliant on countries like China and Taiwan for their semiconductors. In fact, only about 12.5% of semiconductor manufacturing is done in the United States.

Of course, this creates a tremendous opportunity for the companies that manufacture these chips. And it comes at a good time. The semiconductor sector is notoriously cyclical and was coming down from the elevated demand for the 5G buildout.

In this special presentation, we’ll give you a list of seven semiconductor companies that you can invest in to take advantage of this opportunity.

View the "7 Semiconductor Stocks Set to Gain From the Chip Shortage".

Enter your email address below to receive a concise daily summary of analysts' upgrades, downgrades and new coverage with MarketBeat.com's FREE daily email newsletter.