Good morning, and happy Friday.

Forget the taper tantrum. The markets are confronting a new kryptonite: a tax tantrum. The news broke yesterday afternoon of a big, fat Biden tax-hike proposal, roiling the markets, and really socking bitcoin and its peers.

I can hear some of you grumbling from here.

Today, calmer heads are prevailing. U.S. futures have been ticking higher throughout the morning. Across the Atlantic, in Europe, there’s more upbeat autos news, and economic data continues to show the recovery is well on track.

Let’s see what else is moving markets.

Markets update

Asia

• The major Asia indexes are mixed in afternoon trade. The Hang Seng is the best of the bunch, up 0.7%.
• Here’s a giant green stat: If China were to transition from coal to renewables it would save $1.6 trillion, a rosy new report found. Alas, China’s addiction to coal is staggering. It will be a tough habit to break.

Europe

• The European bourses are sinking out of the gates with the Stoxx Europe 600 down nearly 0.3% in the opening minutes.
• Shares in Daimler were up 1.3% this morning as the German automaker raised its bottom-line outlook. But the company warned that, because of the industrywide chips shortage, “visibility is limited at present.”
• If you’re long German autos, you’re loving life. Daimler is up 29% YTD. Tesla? It’s up 2%.
• The Italian shoes and handbags maker Tod’s is soaring, up more than 10% on news Bernard Arnault’s LVMH has upped its stake in the luxury label. Full disclosure: I have a 20-year-old pair of Tod’s shoes in my closet. They’re indestructible, super comfortable, and, might I say, fichissimo. Nobody beats Italian shoes. #Fightme.

U.S.

• U.S. futures are up slightly, and gaining. Unless there’s a decent rally today, all three major averages will end the week in the red.
• Small cap futures, as measured by the Russell 2000, are solidly higher.
• Shares in Intel are off 2.1% in pre-market trading despite the chip giant crushing estimates. The bad news: profits will be under strain this quarter as it ramps up manufacturing to catch up to rivals.
• Who’s on the earnings calendar today? We have Honeywell, American Express and Kimberly-Clark, to name a few.

Elsewhere

• Gold is higher, trading above $1,780.
• The dollar doesn’t like the tax news either. It’s down a tick.
• Crude is up with Brent trading above $65/barrel.
• Look out below! Bitcoin has bombed below $50K as the weeklong sell-off continues. It’s down seven out of the past eight sessions.

***

By the numbers

$260 billion

Crypto bulls, it’s been a week to forget. The sell-off in bitcoin, ethereum, and, yes, Dogecoin, in the past 24 hours has been ferocious. By CNBC’s tally, crypto currencies have plunged $260 billion in the past 24 hours. That’s more than the market cap of Exxon Mobil. I’m old enough to remember Doge Day—a.k.a., Tuesday—when Doge bulls tried to pump that dog-of-an-alt-coin to a buck. It’s sitting at 20 cents this morning, a drop of 56% from its all-time high on [checks notes] a full week ago. Now, there’s a lot of chatter on Twitter instructing bulls to HODL, and buy on the dip—whatever that may be.

2.1 billion

I’ve been watching like a hawk the recent drop-off in share volumes over the past month or so, a period in which the benchmark S&P 500 is up solidly. I was curious to see if the relative slump in action portends any big moves in the market. Typically, you see the highest volumes on risk-off days (when there are big down-days in the market). With that in mind, I asked Refinitiv to crunch the numbers for me. They found that, during this period, the average trading volume clocked in at roughly 2.1 billion shares trading hands—that’s down 17% from the six-month average of 2.5 billion. All those big numbers tell us what we already know—we’re in a period of remarkably low volatility. On cue, over the past six months, the average price of the S&P constituents has risen 27%. So, what does this tell us? In a bull market, low volumes mean status quo. And that should make bulls pretty happy. However, if you’re jumping into the markets today, you’re going to pay a much higher premium—27% higher—for a particular S&P share than you would have just six months ago.

43.4%

That’s reportedly the new top tax rate the Biden Administration is seeking in order to plug a hole in America’s shaky finances as it readies trillions in fiscal spending. Wall Street is no fan, as the plan would amount to a near doubling of the tax rate for America’s most wealthy—a whopping 0.32% of American taxpayers would be impacted by such a hike. As you know, the current capital gains tax is 23.8% when net investment income is factored in. There have been a lot of warnings over the years that messing with that relatively low rate in any way would put the chill on the great stock market boom of the past generation. The early reports say the White House wants to equalize the tax on income from the work we perform and the capital gains on investments for America’s highest earners. In economic terms, this is what you’d call a progressive tax. Eyed from Europe, the land of many such taxes, they’re calling it what it is—a redistributive tax. As UBS chief economist Paul Donovan said in a note this morning, “the Biden administration’s fiscal plans should be considered biased to ‘tax and spend’ redistribution rather than fiscal stimulus.” How did the markets react to all this? Shares sunk in afternoon trading on Thursday when the news broke, but then recovered a good chunk of the losses. Why the muted response? The chances of such a radical tax overhaul passing Congress are slim.

Clarification: As an eagle-eyed reader pointed out, the capital gains tax climbs from 20% to 23.8% for long-term capital gains. Using that as the top tax rate, the Biden proposal of 43.4% would amount to an 82% rise over the current level.

***

Have a nice weekend, everyone. I’ll see you back here on Monday… But first, there’s more news below.

Bernhard Warner
@BernhardWarner
Bernhard.Warner@Fortune.com

As always, you can write to bullsheet@fortune.com or reply to this email with suggestions and feedback.

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Three buddies on Robinhood. The Wall Street Journal has a lovely piece about three friends who discovered the ups and downs of investing on the popular investing app. There were times the adrenaline rush was like the kind they got from playing the shoot-em-up video game, Call of Duty, particularly when they were up big. In the end, however, they're licking their wounds.

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