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| World markets driven to record highs by Trump tax bill – as it happened | World markets driven to record highs by Trump tax bill – as it happened |
| (35 minutes later) | |
| A quick PS: The House of Representatives has passed the tax reform package, paving the way for a vote in the Senate later today. | |
| JUST IN: House Republicans have passed a sweeping tax overhaul #tictocnews pic.twitter.com/abTUfiiSLR | |
| The bill passed by 227 to 203, after House Speaker Paul Ryan declared: | |
| “Today, we are giving the people of this country their money back. | |
| But there were also protests by demonstrators unhappy with the bill (which, as explained earlier, appears to shovel most of its benefits to high earners and corporations). | |
| One accused Ryan of lying, as others called in vain for the bill to be dropped. | |
| Tax bill debate on the House floor briefly interrupted after protesters in the gallery shouted "Kill the bill! Don't kill us!" | |
| US markets have moved ahead once more, although after Monday’s rise as the Republican tax bill seemed to gain enough converts to pass in Congress, the increase is understandably more muted. | US markets have moved ahead once more, although after Monday’s rise as the Republican tax bill seemed to gain enough converts to pass in Congress, the increase is understandably more muted. |
| As the crucial vote approaches, the Dow Jones Industrial Average opened 49 points or 0.2% higher, although it is currently only around 5 points higher. The S&P 500 added 0.14% at the open. | As the crucial vote approaches, the Dow Jones Industrial Average opened 49 points or 0.2% higher, although it is currently only around 5 points higher. The S&P 500 added 0.14% at the open. |
| But the Nasdaq composite dipped 0.03%. The Republican plans, including a hefty cut in corporation tax, will benefit businesses but technology firms may miss out. They hold plenty of cash off-shore and will have to pay a higher tax on this next year. However they could always repatriate the proceeds of overseas operations, which has been a factor so far in Nasdaq’s strength. | But the Nasdaq composite dipped 0.03%. The Republican plans, including a hefty cut in corporation tax, will benefit businesses but technology firms may miss out. They hold plenty of cash off-shore and will have to pay a higher tax on this next year. However they could always repatriate the proceeds of overseas operations, which has been a factor so far in Nasdaq’s strength. |
| On that note, it’s time to close for the day, barring any major developments. Thanks for all your comments and we’ll be back tomorrow. | On that note, it’s time to close for the day, barring any major developments. Thanks for all your comments and we’ll be back tomorrow. |
| The Guardian’s Business Today email has expanded its property coverage. | The Guardian’s Business Today email has expanded its property coverage. |
| As well as key news headlines, an agenda of the day’s main events, insightful opinion pieces and a quality feature, there is now more coverage of house prices, mortgages, the rental market – and the best picture galleries from our Money pages. | As well as key news headlines, an agenda of the day’s main events, insightful opinion pieces and a quality feature, there is now more coverage of house prices, mortgages, the rental market – and the best picture galleries from our Money pages. |
| For your morning shot of financial and property news, sign up here: | For your morning shot of financial and property news, sign up here: |
| Newsflash: American construction companies started building more houses than expected last month, in another sign that the economy is robust. | Newsflash: American construction companies started building more houses than expected last month, in another sign that the economy is robust. |
| The latest US housing statistics show that housing starts increased 3.3% to a seasonally adjusted annual rate of 1.297 million units. | The latest US housing statistics show that housing starts increased 3.3% to a seasonally adjusted annual rate of 1.297 million units. |
| The number of single-family housing units surged to a 10-year high, and housebuilders also filed more applications for new business permits than expected. | The number of single-family housing units surged to a 10-year high, and housebuilders also filed more applications for new business permits than expected. |
| US Housing Starts and Building Permits both higher than expected in November $USD pic.twitter.com/AAy9roAEd6 | US Housing Starts and Building Permits both higher than expected in November $USD pic.twitter.com/AAy9roAEd6 |
| Joseph Brusuelas, chief economist of consultancy firm RSM, tweets: | Joseph Brusuelas, chief economist of consultancy firm RSM, tweets: |
| Solid 3.3% increase in November housing starts to a average annualized pace of 1.297 million with forward looking at 1.298 million. Homes under construction up 1%, with single family homes up 2.5% and multifamily down 0.2%. There are 1.11 million homes under construction. | Solid 3.3% increase in November housing starts to a average annualized pace of 1.297 million with forward looking at 1.298 million. Homes under construction up 1%, with single family homes up 2.5% and multifamily down 0.2%. There are 1.11 million homes under construction. |
| Dennis de Jong, managing director at trading firm UFX.com, fears that the US tax bill could cause long-term damage to the American economy. | Dennis de Jong, managing director at trading firm UFX.com, fears that the US tax bill could cause long-term damage to the American economy. |
| De Jong says investors shouldn’t ignore the concerns that richest Americans will snaffle most of the benefits (as explained here). | De Jong says investors shouldn’t ignore the concerns that richest Americans will snaffle most of the benefits (as explained here). |
| “With Republicans poised to push through Donald Trump’s GOP tax bill, investors are eyeing up something of an early Christmas present. | “With Republicans poised to push through Donald Trump’s GOP tax bill, investors are eyeing up something of an early Christmas present. |
| “The bill’s expected approval has already driven world stock markets to record highs and, despite the likely absence of John McCain and Thad Cochrane, investors can start counting their chickens. | “The bill’s expected approval has already driven world stock markets to record highs and, despite the likely absence of John McCain and Thad Cochrane, investors can start counting their chickens. |
| “While the American middle class may be impacted negatively, the nation’s big corporations and multi-millionaires are likely to revel in the latest tax cuts and that’s what investor confidence is built upon. The sting in the tail could be that while the population of Wall Street cash in, the everyday American will be worse off and that’s concerning for the long term stability of the world’s largest economy.” | “While the American middle class may be impacted negatively, the nation’s big corporations and multi-millionaires are likely to revel in the latest tax cuts and that’s what investor confidence is built upon. The sting in the tail could be that while the population of Wall Street cash in, the everyday American will be worse off and that’s concerning for the long term stability of the world’s largest economy.” |
| The Financial Times has published a handy explanation of which US companies will benefit most from the cuts to US corporation tax (from 35% to 21%). | The Financial Times has published a handy explanation of which US companies will benefit most from the cuts to US corporation tax (from 35% to 21%). |
| They say: | They say: |
| Companies with relatively high tax rates and mainly US-based revenues, which are not hit by the new charge on overseas assets, will gain the most from the new code. | Companies with relatively high tax rates and mainly US-based revenues, which are not hit by the new charge on overseas assets, will gain the most from the new code. |
| Oil refiners, railroads, airlines and banks are expected to be among the biggest beneficiaries. Delta Air Lines was one of the first companies to specify the expected boost to its profits, saying the tax cut would raise next year’s earnings per share by about 18-19%. | Oil refiners, railroads, airlines and banks are expected to be among the biggest beneficiaries. Delta Air Lines was one of the first companies to specify the expected boost to its profits, saying the tax cut would raise next year’s earnings per share by about 18-19%. |
| One of the biggest gainers is likely to be Warren Buffett’s Berkshire Hathaway, in part because of the conglomerate’s focus on the US economy. The tax cut will boost its earnings next year by about $2.6bn, or 15%, according to forecasts by KBW, the investment bank. | One of the biggest gainers is likely to be Warren Buffett’s Berkshire Hathaway, in part because of the conglomerate’s focus on the US economy. The tax cut will boost its earnings next year by about $2.6bn, or 15%, according to forecasts by KBW, the investment bank. |
| The average company is likely to get a 10% boost to its earnings. | The average company is likely to get a 10% boost to its earnings. |
| More here: US companies set to be big winners from Trump’s tax reform | More here: US companies set to be big winners from Trump’s tax reform |
| The US stock market has gained over 20% this year, rather embarrassing the experts who claimed a Donald Trump victory would sent shares sliding. | The US stock market has gained over 20% this year, rather embarrassing the experts who claimed a Donald Trump victory would sent shares sliding. |
| The president himself hasn’t been shy about taking credit for the rally. And in a new series of tweets, he claims the market will keep rising in 2018.... | The president himself hasn’t been shy about taking credit for the rally. And in a new series of tweets, he claims the market will keep rising in 2018.... |
| DOW RISES 5000 POINTS ON THE YEAR FOR THE FIRST TIME EVER - MAKE AMERICA GREAT AGAIN! | DOW RISES 5000 POINTS ON THE YEAR FOR THE FIRST TIME EVER - MAKE AMERICA GREAT AGAIN! |
| Stocks and the economy have a long way to go after the Tax Cut Bill is totally understood and appreciated in scope and size. Immediate expensing will have a big impact. Biggest Tax Cuts and Reform EVER passed. Enjoy, and create many beautiful JOBS! | Stocks and the economy have a long way to go after the Tax Cut Bill is totally understood and appreciated in scope and size. Immediate expensing will have a big impact. Biggest Tax Cuts and Reform EVER passed. Enjoy, and create many beautiful JOBS! |
| US stock markets are expected to push a little higher when trading begins in two hours time, extending yesterday’s record highs. | US stock markets are expected to push a little higher when trading begins in two hours time, extending yesterday’s record highs. |
| But it could be a cautious session as investors wait for Congress to vote on the tax reform bill. | But it could be a cautious session as investors wait for Congress to vote on the tax reform bill. |
| Markets are currently looking very December in terms of volume and movement. US data at 13:30 could give us a lift but all eyes on the House of Representatives for their tax bill vote. Dow + 34S&P + 0.8 | Markets are currently looking very December in terms of volume and movement. US data at 13:30 could give us a lift but all eyes on the House of Representatives for their tax bill vote. Dow + 34S&P + 0.8 |
| Craig Erlam of City firm OANDA says Trump’s promise to cut taxes has driven shares higher this year: | Craig Erlam of City firm OANDA says Trump’s promise to cut taxes has driven shares higher this year: |
| Tax reform was one of the key initiatives that contributed to Donald Trump’s election victory last year as he vowed to revitalise a sluggish US economy. While it may have taken longer to deliver than he expected, it would appear that Republicans determination to give Americans an early Christmas present has paid off, although there has been numerous debates about who actually stands to benefit most from the bill. | Tax reform was one of the key initiatives that contributed to Donald Trump’s election victory last year as he vowed to revitalise a sluggish US economy. While it may have taken longer to deliver than he expected, it would appear that Republicans determination to give Americans an early Christmas present has paid off, although there has been numerous debates about who actually stands to benefit most from the bill. |
| Markets have clearly benefited from the prospect of tax reform over the last 13 months and the Santa rally that we’ve seen in the run up to Christmas is another reflection of that. It will be interesting to see if this will be maintained for the rest of the week or whether it becomes a “buy the rumour, sell the fact” scenario. | Markets have clearly benefited from the prospect of tax reform over the last 13 months and the Santa rally that we’ve seen in the run up to Christmas is another reflection of that. It will be interesting to see if this will be maintained for the rest of the week or whether it becomes a “buy the rumour, sell the fact” scenario. |
| MPs have strongly reprimanded some of the UK’s biggest energy companies for failing to shift millions of customers quickly enough off “rip-off” default tariffs. | MPs have strongly reprimanded some of the UK’s biggest energy companies for failing to shift millions of customers quickly enough off “rip-off” default tariffs. |
| During a heated and sometimes testy hearing of the Business, Energy and Industrial Strategy committee, British Gas, SSE and E.ON were repeatedly grilled over why they were not contacting households more often to move them off standard variable tariffs. | During a heated and sometimes testy hearing of the Business, Energy and Industrial Strategy committee, British Gas, SSE and E.ON were repeatedly grilled over why they were not contacting households more often to move them off standard variable tariffs. |
| SSE also came under fire from Rachel Reeves, the committee chair, for the 19.3% gender pay gap in its workforce. | SSE also came under fire from Rachel Reeves, the committee chair, for the 19.3% gender pay gap in its workforce. |
| British Gas, the UK’s biggest energy supplier, admitted that as the sector moves beyond the controversial default tariffs which the government is going to cap, it would see lower profits. | British Gas, the UK’s biggest energy supplier, admitted that as the sector moves beyond the controversial default tariffs which the government is going to cap, it would see lower profits. |
| Rachel Reeves versus Centrica's Sarwjit Sambhi at the BEIS committee hearing on energy price caps pic.twitter.com/Hg3IwVxQfO | Rachel Reeves versus Centrica's Sarwjit Sambhi at the BEIS committee hearing on energy price caps pic.twitter.com/Hg3IwVxQfO |
| The cold snap which gripped Britain last week hit takings at retailer John Lewis last week. | The cold snap which gripped Britain last week hit takings at retailer John Lewis last week. |
| Sales at John Lewis’s department stores were down 0.6% year-on-year at £171.4m, as shoppers were deterred by ice conditions and flurries of snow. | Sales at John Lewis’s department stores were down 0.6% year-on-year at £171.4m, as shoppers were deterred by ice conditions and flurries of snow. |
| The company says: | The company says: |
| Adverse weather and heavy snow across the country saw fewer people head outside to shop - impacting all categories. However, trade picked up towards the end of the week. | Adverse weather and heavy snow across the country saw fewer people head outside to shop - impacting all categories. However, trade picked up towards the end of the week. |
| If other retailers had a similar experience, it could mean the vital pre-Christmas period got off to a slow start. | If other retailers had a similar experience, it could mean the vital pre-Christmas period got off to a slow start. |
| Sales at the group’s Waitrose store were flat. But there were also signs that shoppers were in party mood, with sales of champagne and prosecco strong. | Sales at the group’s Waitrose store were flat. But there were also signs that shoppers were in party mood, with sales of champagne and prosecco strong. |
| It adds: | It adds: |
| Freezing temperatures also led to strong sales of hearty food, with pie sales up 12% and soup up 12%. Customers also opted for convenience during a busy pre-Christmas week as ready meal sales increased 7%. | Freezing temperatures also led to strong sales of hearty food, with pie sales up 12% and soup up 12%. Customers also opted for convenience during a busy pre-Christmas week as ready meal sales increased 7%. |