September 8, 2011 - The President's Speech, Bernanke Comments and Potential Additional Fed Action, and EU Inflation Controls and ECB Bank Focus
1. All three (above) matters are in the headlines today morning, with equity futures signaling a possible lower opening in the U.S. markets after strong valuation gains September 7.
2. Considering 1., today's top issues will be Mr. Bernanke's comments, and the President's speech. However, in setting the agenda and action steps for near term U.S. economic recovery and budget and fiscal policies.
3. While the President's speech is forecasted to discuss comprehensive stimulus proposals including a) an extension of payroll tax cuts, b) federal aid to state and local governments to fund salaries, c) infrastructure, and d) additional matters. Any proposals will endure Democrat and Republican scrutiny.
4. For example, to be considered is the House Democrats' review of an array of revenue-raising proposals to be considered by the Joint Select Committee on Deficit Reduction. As reported by the Bureau of National Affairs, The summary of revenue proposals was confirmed by a House Ways and Means Committee aide as options intended to be presented to House Democrats.
5. House Democrat revenue proposals also include establishing a 5.4 percent surcharge on upper-income earners, extending estate taxes at 2009 levels, allowing the expiration of the 2001 and 2003 tax cuts for upper-income earners, and treating some income as ordinary income instead of capital gains.
6. Despite significant market volatility and historic global economic events, the U.S Dow at September 7, 2011 had increased more than 11% over September 1, 2010 levels while the U.S. and German 10 year bonds have been yielding below 2%. Meanwhile, emerging and frontier markets show great promise to attain valuation gains. Investors should continue to embrace long term portfolio models possessing diversification and global participation attendant to their risk tolerance and investment time horizon and total return objectives. Today's news and events should not change these investor mandates.