Withholding tax collections looked very strong for March, at first glance. But there was a one day anomaly in the data that skewed the monthly number hugely positive. It was the only day like that. When I adjusted that day to something consistent with the direction of the rest of the month, suddenly things didn’t look so hot. Non-subscribers, click here for access.
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That said, more revenue is more revenue, and for March at least, there was more revenue. That means less Treasury supply. Add that to the positive seasonality of tax collections adding cash to government coffers which in turn leads to massive paydowns of Treasury bills, and April and May still come out as cash cows for stocks and bonds. Non-subscribers, click here for access.
And that’s normally bullish, regardless of all of the market histrionics of the past week. Of course cash doesn’t guarantee a bull stampede, but it means that the gates are open for them to easily run through. Non-subscribers, click here for access.
As you know, this is only part of the big picture. It’s an important one though. This report tells, and shows, you what you need to know to understand what to do with your portfolio to protect yourself from what’s to come, and even profit from it.
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