Forget the modest increase in jobs reported by the BLS. Withholding tax collections were strong in April. The US Treasury is flush with more cash than expected, well above its target for the end of Q2. This means that T-bill paydowns may extend for longer than just through late May as is normally the case. That is, unless the Federal Government decides to hold on to all of the massive $900 billion war chest that it has accumulated through better-than-expected tax collections and lower spending than last year in April, mostly the former. Non-subscribers, click here for access.
Subscribers, click here to download the report.
This is the second straight month of strong tax revenue. That means less supply. The usual April-May tax bulge cash cow could hang around through June, when the government sees a mini tax collection bulge from June estimated taxes. That could extend the T-bill paydown period into late June or early July before the well runs dry. Non-subscribers, click here for access.
And that, my friends, will be a xxxx xxxxx between now and the end of the second quarter. Non-subscribers, click here for access.
As I wrote in this update last month, “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.
This report gives the details of the April tax deluge, what it means for the market, and how you can use that information in your trading and investment strategy.
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