Tech Growth/Biden Tax Plan:

 This week's earnings calendar is jammed with all the big tech companies, including Google, Microsoft, Apple, Amazon, Twitter and Facebook. Tech has driven growth in the markets recently and solid news from them could result in another major rally and driver for stock gains. Now that the world is beginning the transition period from a pandemic to a somewhat normal way of life, it remains to be seen if the remote-work experience will maintain itself. Many companies have declared they will continue to work from home, ensuring the need of a wide array of technical tools and services. Although there is skepticism behind virtual doctor visits and how effective they really are, they are expected to be in continued and widespread use throughout 2021. Tech stocks are poised for potential growth in 2023 thanks to what the pandemic has done to the way we interact and conduct business.  

What has many large companies, including tech worried, is the newly proposed corporate tax bill, looking to heighten capital gains taxes from the previous 20%, to upwards of 50%+ in some states. News of this caused the market to correct itself now that the Biden administration is on the regulatory prowl. The specific corporate tax rate would rise to 28% from 21%, but companies making profits over $100 million will have to pay an additional 15% alternative minimum tax (AMT). On top of this, the proposed tax plan would incentivize investments in green energy and provide tax credits accordingly to such companies that invest that way. It will be hard to tell how this new tax plan would affect these tech companies and their valuations, but the AMT will definitely have something to do with it. Another area that will be important is the difference between reported income for financial reasons and reported income for corporate tax returns. After all, Biden wants to eliminate as many loopholes as possible, and tax these highly valued companies as much as he can without hurting the economy too severely. 

Airbnb (ABNB):

Airbnb has returned to Earth after an impressive 222% gain in the first two months following its December IPO. Now with a new, more realistic base (trading at 174.50), the stock is due for some positive momentum in its moving averages. This momentum will likely be sparked by a continued exponential vaccination trend in the U.S. that has resulted in 42% of the country receiving at least one dose. Though this breakout hasn’t yet begun, it’s something to keep an eye on as the price begins to enter the upper bounds of its current regression channel.  

All in all, Airbnb is exiting the pandemic in better shape than most expected. Revenues have fallen but only by 27.66%. While any figure in the red, pandemic or not, is concerning, the potential green ahead for Airbnb over the next 2 years is endless as saving rates hovered around 12% or higher since last March. Additionally, the work-from-home environment will allot renters the freedom to extend their trips to increase the top line.