| August 5, 2025‘Cash Flow is King’
Why did the DOW go up 500 pointsthis8/4/2025after theAugust 1 tariffs hit, along withthe nasty restatement of a jobs report?Some pundits have suggested thatthe EU suspending tariff countermeasures for six monthswas part of the catalyst. However, inLarry Kudlow’s, FOX NEWS, 8/4/2025,presentation, where he cited a recent Wall Street Journal article, he postulated that it was more closely tied to thenew corporate tax benefitsthat havecome out ofthe recent ‘Big Beautiful Bill.’
It ‘Flows’ like this:
According to the Presentation
The benefits of100% immediate depreciation for new business equipment and even factories,is starting the show up at corporations. In other words, if a corporation upgrades its technology, a company canwrite off the expense in year one. This is a tremendous cost savings to the business. In addition, if a businessbuilds a new plant in the US, the ultimate onshoring, corporations cannow avoid tariffs, which is a huge motivation. The ultimate effect is to now free up huge amounts of cash flow to corporations that can be used for a myriad of purposes: new hires, big pay increases, new training, AI updates, reduction of debt or stock buybacks or distributions to stockholders. The presentation, also citesDavid Zion, in the Wall Street Journal article, who states that that these tax savings could affect 369 of the 500 companies in the S&P 500, potentially raising corporate tax flow by 10%.
Cash Flow being King…
appears to be
flowing into the economy…
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Russell E. Towne, LPL Financial Advisor, is a registered representative with and Securities and Advisory Services offered through LPL Financial, a Registered Investment Advisor. Member FINRA/SIPC.
The opinions expressed in this material do not necessarily reflect the views of LPL.