New York politicians have taken the New York Stock Exchange (NYSE) and the National Association of Security Dealers (NASD) more or less for granted. The existence of the two exchanges in New York City make for easy targets for tax hungry politicians in Albany.
But markets find solutions. Just as individuals are out migrating from California and New York, organizers are now touting, yes, the Texas Stock Exchange or TXSE. The group has raised $120 million to create an electronic exchange in Dallas. The idea would be more transparency and lower fees. Exchanges in towns like Philadelphia and Kansas City have pretty much disappeared.
But backers of TXSE include a couple of serious players — BlackRock and Citadel Securities. This is a continuing pattern. The creation of DFW airport in 1972 and the expansion of Atlanta’s Hartsfield in 1977 created new options. Now one could fly anywhere in the world from a snow free airport. JC Penny’s was the first NYC firm to bail and come to Texas. Now there are more Fortune 500 companies headquartered in Texas than any other state. It is far more convenient for a stock exchange to be in the Central Time Zone than on the east or west coast. And then there is the state and city income tax in NYC for high earners of 14.8%. Consider that NY and Florida have about the same populations. But Florida’s state budget is half that of NY! Residents in high tax states are voting with their feet.
It has been a volatile week for energy and metals. Crude oil dropped $3 Monday. It has since returned to the lower end of its $75-80 range, trading today at $76.07 up 52 cents from Thursday’s close. July gasoline futures have dropped from $2.80 but are up from the Tuesday low to $2.40.
Gold is correcting, down $62 which sounds awful but that is a 2.5% drop. Silver is down $1.72 retesting the break-out at $30.
The old admonition of After May Go Away is true once again. Bond prices have rallied from a late April low.
The Dow Industrials peaked mid-May around 40,000, dipped to 38,000 and are now at 38,949. This is typical summer action with prices drifting in no particular direction.
