US: Its tax all the way - BBH

The S&P 500 will likely trade higher, at least in early turnover and if the recent swoon was spurred by concern that the Alternative Minimum Tax had been retained in the Senate tax reform, then some investors may be more relaxed as several leading Senators, including Hatch, have indicated that it will be dropped in the final bill, according to analysts at BBH.

Key Quotes

“The Senate and House have now named the members of the reconciliation committee.  While they sort it out, the focus shifts to the spending authorization which, if not renewed, will lead to a government shutdown on Saturday.  The House may vote on a measure today to extend the spending authorization until December 22.  The Senate may vote on the short-term extension tomorrow.”  

“The narrow Republican majority in the Senate may get even smaller if they do not hold on to the seat in Alabama, which will hold its special election on December 12.  Consider that the Senate tax bill passed with a one vote majority.  The deal that Collins struck over health care reform apparently is not supported by House Speaker Ryan.  If she were to vote against the final bill and the GOP loses the Alabama seat, it could jeopardize the tax changes.  Separately, Democrat Senator Franken is expected to resign today.  The Democratic governor would like to ensure that the seat stays in the Democrat hands.”