Morning Market Thoughts

by DAN Good morning. Believe it or not, the market is set to….wait for it…open slightly down. This has been the nature of the market for the past month and a half. Flat open. Slightly higher open. Open slightly lower. Open flat. Lather, rinse, repeat.

Just two items of interest for me today. First, the Case-Shiller Housing Index (20-City Composite) Index continues to show steady appreciation in the real estate market, though slightly below forecasts. But overall, sales and appreciation are solid. This is good news for markets. If housing data was showing a decline, then the flat, narrow market would be more of a concern to me because of the danger of slipping into recession. But with housing strong, it’s not a problem right now.

Next, Apple’s trick over in Ireland is finally losing its magic. The European Commission ruled that Apple is on the hook for at least a $1.1 billion fine in back taxes, and a tax of $14.5 billion bucks, for “illegal tax benefits” from its operations in Ireland. Ireland, of course, is really ticked off and is appealing the decision. Why? Because Apple employs about 5,000 people in Cork, Ireland. And the fine folks in that nation like having 5,000 jobs…and all the economic benefits that come along with the local residents who are employed. When you’ve got a job, you also have money to spend on clothes, food, insurance, housing, cars, eating at restaurants, subscriptions to great information like Stock Market Mentor (a must for every market participant), schools, etc.

It will be interesting to see how this plays out because I’m wondering if Tim Cook will be as keen about having a big operation in a place that no longer affords favorable tax treatment. (Note: the Ireland trick is an extreme, where a company, properly structured, pays a tax of not more than 1%. That’s a drop in the bucket compared to Ireland’s already super low tax of 12.5%. But I wonder if having its taxes raised will prompt some action on Apple’s part to compensate for higher taxes.

Anyway, that’s really all I’ve got this morning. Just not any market-moving news this morning.

See you in the forum.

–Dan

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