Stocks Stumbled on Biden’s Capital Gains Proposal

Tale of the Tape

Good evening, y’all! After a day like today, thank goodness tomorrow’s Friday!! *TGTF* 😉

Every major index flushed lower after talks of tax hikes swept the street. The Russell 2000 tumbled 0.3% while every other major index dropped 0.9%.

Every sector settled in negative territory. Real estate and industrials were the best of the bunch— basic materials broke down 1.7%. 💔

Crypto also came in on the tax news. $ETH.X quickly lost 100 points and $BTC.X bopped below 52K. 

Solar stocks surged. ⚡ Solar ETF $TAN turned up 3.5% and closed at its highest price since April 6th. $DQ dashed 14%.

Lululemon didn’t get the tax memo. $LULU lept 3.69% and closed at its highest price since February 16. Nice. 

HubSpot also hiked higher. $HUBS closed less than $10 (1.7%) off its all-time high. Will it break to blue skies?? ☀️ ☁️

$COIN collapsed 6% and closed below its opening day’s range for the first time ever. The stock has only finished positive once during its first 7 sessions. 

Snap and Intel reported earnings after the bell. 🔔 See more below.

Here are the closing prints: 

S&P 5004,134-0.92%
Russell 20002,232-0.31%
Dow Jones33,815-0.94%

Earnings Round-Up

Snap 📸 , the self-proclaimed camera company, flew 4.6% after hours. The company beat earnings expectations as revenue grew 66% year-over-year. $SNAP also secured its first- ever positive free cash flow quarter.

Evan Spiegel, Snap’s CEO, commented:

We began 2021 by achieving our highest year-over-year revenue and daily active user growth rates in over three years during the quarter, and delivering positive Free Cash Flow for the first time in Snap’s history as a public company. The strength of our business underscores our relentless focus on product innovation and is a testament to our team’s ability to execute well together over the long term.

Here are the numbers:

EPS: $0.00 vs ($0.05) est
Revenue: $769.5M, +66.4%

And here’s the daily chart:

Intel 💻 also reported earnings after hours. The company beat estimates and raised its full-year guidance. 

Pat Gelsinger, Intel’s CEO, shared:

Intel delivered strong first-quarter results driven by exceptional demand for our leadership products and outstanding execution by our team. The response to our new IDM 2.0 strategy has been extraordinary, our product roadmap is gaining momentum, and we’re rapidly progressing our plans with re-invigorated focus on innovation and execution. This is a pivotal year for Intel. We are setting our strategic foundation and investing to accelerate our trajectory and capitalize on the explosive growth in semiconductors that power our increasingly digital world.

And here are the numbers:

EPS: $1.39 vs $1.14 est
Revenue: $19.7B, -0.7% YoY

$INTC tumbled 2.5% after hours. 

Tractor Supply 🚜 reported earnings early this morning. The rapidly-growing retailer beat on both top and bottom lines, and raised guidance for 2021. 

Hal Lawton, Tractor Supply’s President and Chief Executive Officer, commented:

The Tractor Supply team delivered an exceptionally strong start to the year, and our comparable store sales growth exceeded our expectations. This record performance was achieved by the more than 42,000 Tractor Supply Team Members who are committed to taking care of each other and our customers as the dependable supplier of the Out Here lifestyle. I continue to be incredibly proud of how the organization is responding in the current environment.

Based on our strong performance in the first quarter, the positive macro factors and robust customer retention trends, we are raising our financial outlook for the year and now expect to deliver diluted EPS in the range of $7.05 to $7.40. We believe our resilient business model with a differentiated and loyal customer base, our strategic investments to capture growth opportunities and the strength of our balance sheet position us to capitalize on the momentum in our business in 2021 and beyond.

Here are the numbers:

EPS: $1.55 vs $1.00 est
Revenue: $2.79B, +42.3% YoY

And here’s the company’s ESG report, which was released on Tuesday. 

$TSCO flew 4.4% and closed at a new all-time high. Here’s the daily chart:

Breaking News!

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Happy Earth Day!🌎 ❤️ 🌍 ❤️ 🌏 ❤️  

Happy Earth Day 2021, everyone! 

Despite last year’s pandemic, climate change, wildfires, hurricanes, etc, etc, we made it to another annual celebration of Mother Earth! 🌎 ❤️

Need some inspo to celebrate the planet this year? Check out these celebrities’ eco-friendly initiatives. Here’s a cool National Geographic Earth Day piece from 2018. You can also read about President Biden’s speech from the global climate change summit today. 

Earth Day wouldn’t be complete without photos featuring the place we call home: 

That’s, Uh, A Big Increase

According to sources close to the Biden Administration, the President is expected to propose a new capital gains tax rate that would more than double the current rate.

Under the potential proposal, long-term capital gains would be taxed at 43.4%, a 19.6% increase over the current 23.8% top rate. Leon LaBrecque, an accountant and certified financial planner at Sequoia Financial, described the tax change’s impact:

Capital gains would be the highest-tax income we have.

Sooo where does that number come from? This new plan would tax capital gains as ordinary income, which is already the case for short-term capital gains (for assets held less than 1 year).

This top rate currently impacts single taxpayers with income greater than $445,850, and $501,600 for married couples filing jointly.

The market didn’t enjoy the news. The S&P not only erased the day’s gains, it also closed down 0.9% after reports were published. It is important to note, however, that this plan is not yet an official proposal.

To learn more, check out CNBC’s coverage here.

Well…That’s NiFTy

Intellectual property specialist IPwe and IBM’s blockchain group will partner to turn patents into (take a WILD guess)… NFTs. 

While patent NFTs aren’t that exciting, this is a big first step towards widespread digitization. IPwe and IBM will start portraying patents as NFTs to more adequately capture their value. 

The companies jointly commented: 

The tokenization of intellectual property (IP) will help position patents to be more easily sold, traded, commercialized or otherwise monetized and bring new liquidity to this asset class for investors and innovators.

According to IPwe, only 2-5% of IP in patent markets are valued appropriately— patent NFTs could be a $1T market. 🤭

Here’s CNBC with more.  

Earnings This Week

Be sure to know when your stocks report earnings. Here’s the earnings calendar

Links That Don’t Suck

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