Withholding Tax Haul Hits 23-Month Low
Today, the Treasury Department reported that withholding income tax revenue for yesterday was a paltry $1.46 billion. This was the lowest amount since June 13, 2006 when the number was $1.34 billion according to my database.
I wouldn’t read too much into such a data point since it is possible that it was the result of a data-processing delay, or some other glitch. However, I think the trend in withholdings shows that we should expect more such ultra-low numbers to be popping up in the future.
The jobs reports have been defying the downtrend in withholdings (and the plunge in corporate income tax revenue) but I doubt that can last much longer.
The market feels a bit “crashy” here, and a bad unemployment claims number tomorrow could trigger a bull stampede downward.
May 15th, 2008 at 11:36 am
Hi Matt,
no stampede downward after initial claims announcement. We have to wait a little bit longer. Maybe we will see another sell-off at the end of the trading session. Good luck!!!
May 15th, 2008 at 12:13 pm
Hi Dressguard,
Right, the claims number wasn’t enough to scare anybody. This continues to be a “Slow-Motion Slow-Down”. But eventually, it will sink in.
Matt
May 15th, 2008 at 2:29 pm
There seems to be no sell-off today. How do you interpret your very nicely drawn chart “euphoric failure” after today’s action???
BTW: What software did you use for this chart???
May 15th, 2008 at 3:21 pm
We had a small gap-up today, but it wasn’t an exhaustion gap, so I wouldn’t compare it to the other gaps on that chart. This morning, we saw that the bulls were indeed feeling hesitant after yesterday’s sell-off. The rally was pretty clearly the result of a sector rotation out of oil. If you make an intra-day chart with SPY and USO, you can see the direct relationship. Sector rotations defy all logic. It is very important to be aware of what oil is doing at every moment. If you see the money coming out, and can spot where it is going, you have a pretty good chance of riding along on the long side for a quick day trade.
I made that chart with Excel 2007.
Matt