Treasury pick concealed $95 million Cayman stash
President-elect Donald Trump’s cabinet nominees have come under harsh criticism during the vetting process. Steven T. Mnuchin, President-elect Trump’s pick to be Treasury secretary was no exception. The New York Times reported Mnuchin, a former Goldman Sachs banker, failed to initially reveal nearly $100 million of his assets on Senate Finance Committee disclosure documents, as well as his role as a director of an investment fund in the Cayman Islands, long considered a tax haven. In a revised questionnaire, Mnuchin disclosed $95 million in real estate holdings and his position as the director of the Cayman Islands-based investment fund. He said the omissions were not intentional and characterized the government forms as “quite complicated.”
Highly taxed companies betting on a rate cut
Bloomberg reports many highly taxed companies have soared to new market highs on the expectation that President-Elect Donald Trump will cut tax rates. Companies, including CME Group Inc. and Gap Inc., have returned almost double the Standard & Poor’s 500 Index since the election and added $79 billion in value, according to a 49-stock basket maintained by Goldman Sachs Group Inc., Bloomberg’s data shows. Those are high stakes for the equity market as Donald Trump takes office. The stocks could suffer if the new president doesn’t deliver on his proposal to lower the corporate tax rate from 35 to 15 percent.
CSX shares soar as new exec takes the helm
Shares of CSX Corp., the biggest railroad in the eastern U.S., soared after news that Canadian Pacific Railway Ltd. CEO Hunter Harrison will team with an activist investor to restructure the company. The Financial Times reported Harrison has a reputation for efficiency. Harrison was working on an agreement to partner with Mantle Ridge, a New York-based hedge fund run by a former associate of activist investor Bill Ackman, to change CSX management structure, according to The Wall Street Journal. The freight railroad industry has been hurt by the decline in the coal industry as power plants turn to natural gas.
Lack of consensus at Davos
Every year, some of the world’s biggest market-movers gather in Davos, Switzerland at the World Economic Forum. This year, there were more questions than answers. Investors struggled to understand the rise of populist groups that are upending the long-standing consensus that free-trade, open markets and globalization benefit nations as a whole, reported The New York Times. While the U.S. has long advocated for free trade and open markets, this year Chinese President Xi Jinping championed those causes, providing a juxtaposition to President-elect Donald Trump, who has called for renegotiating long-standing trade agreements, including NAFTA.