{"id":101774,"date":"2017-02-06T10:23:25","date_gmt":"2017-02-06T15:23:25","guid":{"rendered":"http:\/\/countingpips.com\/?p=101774"},"modified":"2017-02-06T06:24:03","modified_gmt":"2017-02-06T11:24:03","slug":"the-no-1-benefactor-of-paul-ryans-border-tax-plan","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/forex\/2017\/02\/the-no-1-benefactor-of-paul-ryans-border-tax-plan\/","title":{"rendered":"The No. 1 Benefactor of Paul Ryan\u2019s Border Tax Plan"},"content":{"rendered":"<div id=\"inves-763719747\" class=\"inves-below-title-posts inves-entity-placement\"><div id =\"posts_date_custom\"><div align=\"left\">February 6, 2017<\/div><hr style=\"border: none; border-bottom: 3px solid black;\">\r\n<\/div><\/div><p>By <a href=\"http:\/\/WallStreetDaily.com\/\"><u>WallStreetDaily.com<\/u><\/a> <img loading=\"lazy\" decoding=\"async\" class=\"attachment-home-th size-home-th wp-post-image\" style=\"display: block; margin-bottom: 5px; clear: both;\" src=\"https:\/\/s3.amazonaws.com\/wallstreetdailywebsite\/wp-content\/uploads\/2017\/02\/0217_mexicotax_feature.jpg\" sizes=\"auto, (max-width: 580px) 100vw, 580px\" srcset=\"https:\/\/s3.amazonaws.com\/wallstreetdailywebsite\/wp-content\/uploads\/2017\/02\/0217_mexicotax_feature.jpg 580w, https:\/\/s3.amazonaws.com\/wallstreetdailywebsite\/wp-content\/uploads\/2017\/02\/0217_mexicotax_feature-300x155.jpg 300w\" alt=\"The No. 1 Benefactor of Paul Ryan's Border Tax Plan\" width=\"580\" height=\"300\" \/><\/p>\n<p>Among the most powerful catalysts that I follow are policymaking decisions.<\/p>\n<p>I\u2019m talking about the big ones \u2014 like Obamacare, the Dodd-Frank Act or the Clean Coal Act.<\/p>\n<p>Every above-listed legislation had profound impacts on certain stocks.<\/p>\n<p>You\u2019ll recall that\u2026<\/p>\n<ul>\n<li>Obamacare shot health insurance companies to the moon.<\/li>\n<li>The Dodd-Frank Act stung bank stocks.<\/li>\n<li>The Clean Coal Act effectively destroyed the entire coal sector.<\/li>\n<\/ul>\n<p>Now imagine investing alongside such a market-moving catalyst.<\/p><div id=\"inves-3475254395\" class=\"inves-in-content inves-entity-placement\"><hr style=\"border: 1px solid #ddd;\">\r\n<div id=\"inpost_ads_header\">\r\n<p style=\"font-size:10px; float:left; color:#666;\">Free Reports:<\/p><\/div>\r\n<div id=\"inpost_ads\"> \r\n<p style=\"font-size:15px; float:left;\"><a href=\"https:\/\/goo.gl\/1ApBOV\"><img loading=\"lazy\" decoding=\"async\" src=\"https:\/\/investmacro.com\/wp-content\/uploads\/2018\/06\/graph_techs_PD.png\" align=\"left\" width=\"80\"  height=\"55\"\/><\/a>\r\n\t     <a href=\"https:\/\/goo.gl\/1ApBOV\"><b><u>Get Our Free Metatrader 4 Indicators<\/u><\/b><\/a> - Put Our Free MetaTrader 4 Custom Indicators on your charts when you join our Weekly Newsletter<\/p><br><br>\r\n<br>\r\n<br>\r\n<p style=\"font-size:15px; float:left;\"><a href=\"https:\/\/goo.gl\/f3RrHX\"><img loading=\"lazy\" decoding=\"async\" src=\"https:\/\/investmacro.com\/wp-content\/uploads\/2019\/01\/cot_pie_80.png\" align=\"left\" width=\"80\"  height=\"55\"\/><\/a>\r\n\t    <a href=\"https:\/\/goo.gl\/f3RrHX\"><b><u>Get our Weekly Commitment of Traders Reports<\/u><\/b><\/a> - See where the biggest traders (Hedge Funds and Commercial Hedgers) are positioned in the futures markets on a weekly basis.<\/p><br><br>\r\n<\/div>\r\n<hr style=\"border: 1px solid #ddd;\">\r\n<br><\/div>\n<p>Well, I\u2019ve got one for you today.<\/p>\n<p>Speaker of the House Paul Ryan is making serious headway on his border tax amendment.<\/p>\n<p>My senior analyst, Martin Hutchinson, calls Ryan\u2019s plan \u201cingenious,\u201d and Trump is rumored to be warming up to the plan.<\/p>\n<p>Ryan\u2019s border tax is extremely bullish for exporters.<\/p>\n<p>So please allow me to officially wave the checkered flag on a Dow 30 stock perfectly positioned to thrive on legislative action, which is virtually a foregone conclusion.<\/p>\n<p>I asked Hutchinson to squeeze this opportunity for every penny, and he happily obliged.<\/p>\n<p>All of the pertinent details are below.<a name=\"video\"><\/a><\/p>\n<p>Smart investing,<\/p>\n<p>Louis Basenese<br \/>\nChief Investment Strategist, <i>Wall Street Daily<\/i><\/p>\n<hr \/>\n<p><script src=\"\/\/fast.wistia.com\/assets\/external\/E-v1.js\" async><\/script><\/p>\n<div class=\"wistia_responsive_padding\" style=\"padding: 56.88% 0 0 0; position: relative;\">\n<div class=\"wistia_responsive_wrapper\" style=\"height: 100%; left: 0; position: absolute; top: 0; width: 100%;\">\n<div class=\"wistia_embed wistia_async_h3bb48s9aw videoFoam=true\" style=\"height: 100%; width: 100%;\"><\/div>\n<\/div>\n<\/div>\n<hr \/>\n<p><strong>Question:<\/strong> Martin, tell us what\u2019s likely to move the markets over the next few weeks. What\u2019s at the top of your radar screens?<\/p>\n<p><strong>Martin Hutchinson:<\/strong> I think at the top of the radar screens at the moment is Paul Ryan\u2019s new plan for a border tax amendment to corporate tax. I talked last week about possible tariffs and the effect on Mexico. Paul Ryan\u2019s border tax is quite ingenious because under it, the cost of imports won\u2019t be tax-deductible but income from exports won\u2019t be taxable. The details are not clear, but this should pass the World Trade Organization rules because it\u2019s just like a value-added tax, which they\u2019ve got everywhere else. Mexico has one, and all the countries in Europe have them, except that it doesn\u2019t apply to domestic sales. If it passes, exporters should be hugely benefited.<\/p>\n<p><strong>Question:<\/strong> Let\u2019s talk about that a little bit. Why should we care about this as investors, Martin? You say exports will benefit. Is that going to directly impact certain stocks?<\/p>\n<p><strong>Martin Hutchinson:<\/strong> I think so, because what you want to look for is the companies that have a very heavy export concentration. The dollar exchange rate may adjust, but it shouldn\u2019t adjust the full amount. The balance-of-payments deficit, which is currently $500 billion a year and is a problem, will largely disappear. Exporters certainly will hugely increase sales and especially profits.<\/p>\n<p><strong>Question:<\/strong> OK. Do you have your eye on certain stocks that are going to be in a good position when this passes?<\/p>\n<p><strong>Martin Hutchinson:<\/strong> I think so. The United States\u2019 biggest exporter is Boeing, and it sells 80% of its commercial airplane output globally. That\u2019s a huge amount of money. Obviously, it imports quite a bit as well, because it makes parts internationally, but more or less by definition, its exports exceed its imports. It brings stuff in, assembles it in the U.S., adds some more parts and then exports it as an airplane. If you look at the tax effect of Ryan\u2019s plan on Boeing, its exports will be tax-free. Its imports won\u2019t be tax-deductible, but since the exports are more than the imports, its whole commercial airplane business will essentially become tax-free, and that\u2019s a huge benefit to the bottom line.<\/p>\n<p><strong>Question:<\/strong> Martin, we know that share price simply follows earnings, so will this show up in Boeing\u2019s future earnings report? Is that how shares look to benefit from this?<\/p>\n<p><strong>Martin Hutchinson:<\/strong> That\u2019s right, absolutely. If the plan passes, it should do a lot for the stock. Currently, the sales are $95 billion, net income $4.9 billion. It\u2019s all a price-earnings ratio of 21 times, but on the other hand, the dividend yield is 3.4%, which is pretty solid. It\u2019s already an attractive stock at current prices. This should benefit it further and give it some extra kick going into the next couple of years.<\/p>\n<p><strong>Question:<\/strong> Martin, for our really ambitious readers out there, if they want to take a chance on some of the call options trading for an extra pop using leverage, is that a smart play? Would you say stick to the traditional shares?<\/p>\n<p><strong>Martin Hutchinson:<\/strong> I think this is one way you can play the call options because you can buy long-term call options. The January 2019 series are now trading, and the $180 call option, which is about 10\u201312% out of the money, is currently trading for $12. You pay $12 for the chance to buy the profits above $180. That looks like pretty attractive leverage to me \u2014 15-to-1. Of course, if this plan passes, the share price should zoom through those levels.<\/p>\n<p>Good investing,<\/p>\n<p>Martin Hutchinson<br \/>\nSenior Analyst, <i>Wall Street Daily<\/i><\/p>\n<p>The post <a href=\"https:\/\/www.wallstreetdaily.com\/2017\/02\/06\/no-1-benefactor-paul-ryans-border-tax-plan\/\" rel=\"nofollow\">The No. 1 Benefactor of Paul Ryan\u2019s Border Tax Plan<\/a> appeared first on <a href=\"https:\/\/www.wallstreetdaily.com\" rel=\"nofollow\">Wall Street Daily<\/a>.<\/p>\n<p>&nbsp;<\/p>\n<p>&nbsp;<\/p>\n<p>&nbsp;<\/p>\n","protected":false},"excerpt":{"rendered":"<p>By WallStreetDaily.com Among the most powerful catalysts that I follow are policymaking decisions. I\u2019m talking about the big ones \u2014 like Obamacare, the Dodd-Frank Act or the Clean Coal Act. Every above-listed legislation had profound impacts on certain stocks. You\u2019ll recall that\u2026 Obamacare shot health insurance companies to the moon. The Dodd-Frank Act stung bank [&hellip;]<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[],"tags":[],"class_list":["post-101774","post","type-post","status-publish","format-standard","hentry","no-post-thumbnail"],"_links":{"self":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/101774","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/comments?post=101774"}],"version-history":[{"count":2,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/101774\/revisions"}],"predecessor-version":[{"id":101782,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/101774\/revisions\/101782"}],"wp:attachment":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/media?parent=101774"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/categories?post=101774"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/tags?post=101774"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}