CCTV Script 05/12/17

— This is the script of CNBC's news report for China's CCTV on December 5, Tuesday.

The Dow Jones industrial average notched a record closing high on Monday after the Senate narrowly passed a major tax bill over the weekend.

However, after hiting an intraday record and rose more than 300 points at its session high, the 30-stock index quickly narrowed its gains and ended up rising 58.46 points.

Meanwhile, the rest of the market closed lower, as a sharp decline in tech pressured the S&P 500 and Nasdaq composite.

The S&P 500 closed 0.1 percent lower, as information technology fell nearly 2 percent. The index had gained 0.87 percent at its session high, marking marking the first time since Feb 2016, when the S&P 500 gave up such a gain.

The Nasdaq composite lagged, sliding 1.1 percent.

Mean time, we continue to see the capital rotation from big tech companies into sectors like the financials and retailers, who are considered big winners of the tax reform. Analysts say that the current tax bill is not yet a done deal, but still face some uncertainties.

Here's what Ernesto Ramox, head of Quantitative Equity Strategy of BMO Global Asset Management has to say.

[ERNESTO RAMOS, BMO Global Asset Management Head of Quantitative Equity Strategy] "Now the devil will be in the details of the final plan. It didnt help the drop that tax rate of 20% was maybe forged a littble bit by some of the tweets over the weekend suggesting 22%. So we go with a little bit more uncertainty into the negotiations now between the house and the senate to see what the final plan is gonna look like."

Another concern tech investors have is the corporate alternative minimum tax, or, AMT. Over the weekend, the Senate bill jettisoned a long-held Republican goal of repealing the AMT to help pay for last-minute deals that secured the Republican votes for passage.

The 20 percent corporate AMT is an alternative to the regular corporate income tax in computing taxes owed. It is designed to limit the ability of corporations to reduce their tax bills through various deductions and credits, such as a credit for research and development that is especially popular with Silicon Valley technology companies.Corporations must compute taxes using both methods and then pay whichever rate is higher.

Now, with the top corporate rate at 35 percent, few wind up paying the AMT. But if the general corporate tax rate is reduced to 20 percent, yet with the same corporate AMT, there is concern that corporations would not be able to use the R&D credit and have to pay by the AMT tax rate instead.

As Ramos just mentioned, devil is in the details. So what's coming up next for the exact coporate tax rate as well as the AMT, will be closely watched by investors.

Then, here comes the concern of the U.S. debt in the long run.

On Monday JPMorgan said that the U.S. household debt is about to be eclipsed for the first time ever by the even faster rising federal government debt.

As JPM writes in its weekly market recap, prior to the Financial Crisis, household debt relative to federal government debt hit a high of 3 to 1 times. Since then, a combination of bank credit tightness and consumer prudence has sharply limited the growth in household debt, with liabilities increasing just 4% since 3Q 2008. However, JPM adds, quote, the same cannot be said of the federal government, with liabilities increasing almost 150% over the same period and nearly reaching household debt levels for the first time in modern history.

What does this indicate?

While this does not point to an impending crisis, it does mean that the government would be far less able to come to the rescue as it did in 2008. It also means that while tax cuts may take place today, it becomes more probable that they will become tax increases or spending cuts in the future.

CNBC's Qian Chen, reporting from Singapore.

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