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| Trump tax bill drives world markets to record highs – business live | Trump tax bill drives world markets to record highs – business live |
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| 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%. |
| Britain’s financial sector has reacted badly to the news that Brussels won’t accept a special deal for the City of London after Brexit. | Britain’s financial sector has reacted badly to the news that Brussels won’t accept a special deal for the City of London after Brexit. |
| Michel Barnier, the EU’s chief negotiator, told the Guardian that the UK couldn’t have a bespoke deal that gave preferential treatment to certain industries, such as finance. | Michel Barnier, the EU’s chief negotiator, told the Guardian that the UK couldn’t have a bespoke deal that gave preferential treatment to certain industries, such as finance. |
| Barnier warned that Britain’s ‘red lines’ (on leaving the European Court of Justice and ending the free movement of people) meant London must accept a trade agreement similar to Canada’s (which mainly covers goods, not services). | Barnier warned that Britain’s ‘red lines’ (on leaving the European Court of Justice and ending the free movement of people) meant London must accept a trade agreement similar to Canada’s (which mainly covers goods, not services). |
| Barnier said: | Barnier said: |
| There is not a single trade agreement that is open to financial services. It doesn’t exist..... | There is not a single trade agreement that is open to financial services. It doesn’t exist..... |
| In leaving the single market, they lose the financial services passport.” | In leaving the single market, they lose the financial services passport.” |
| He even waved a slide to show how more integrated trade deals aren’t compatible with those ‘red lines’. | He even waved a slide to show how more integrated trade deals aren’t compatible with those ‘red lines’. |
| Michel Barnier showed this slide to EU leaders last week. For EU shows how UK red lines leave FTA as only option. pic.twitter.com/1QadsCe1tY | Michel Barnier showed this slide to EU leaders last week. For EU shows how UK red lines leave FTA as only option. pic.twitter.com/1QadsCe1tY |
| So far, so clear. But TheCityUK, which represents Britain’s financial industry, thinks Barnier should show some festive spirit and work towards a bespoke deal for the UK. | So far, so clear. But TheCityUK, which represents Britain’s financial industry, thinks Barnier should show some festive spirit and work towards a bespoke deal for the UK. |
| Miles Celic, CEO of TheCityUK, says: | Miles Celic, CEO of TheCityUK, says: |
| “It might be Christmas, but Michel Barnier doesn’t need to play Scrooge. Just because financial services have not been encompassed in free trade agreements to date is no reason to dismiss them from a future UK/EU free trade agreement. | “It might be Christmas, but Michel Barnier doesn’t need to play Scrooge. Just because financial services have not been encompassed in free trade agreements to date is no reason to dismiss them from a future UK/EU free trade agreement. |
| Services make up around 80% of the UK’s economy – and around 70% of the EU’s, with financial services making up a significant component of that. It is vital for the future competitiveness of the UK, and Europe as a whole, that UK and EU negotiators work to secure an ambitious and comprehensive deal.” | Services make up around 80% of the UK’s economy – and around 70% of the EU’s, with financial services making up a significant component of that. It is vital for the future competitiveness of the UK, and Europe as a whole, that UK and EU negotiators work to secure an ambitious and comprehensive deal.” |
| David Madden, market analyst at CMC Markets, predicts that Britain’s blue-chip stock index could hit a record highs this week. | David Madden, market analyst at CMC Markets, predicts that Britain’s blue-chip stock index could hit a record highs this week. |
| He writes: | He writes: |
| The FTSE 100 has hit its highest level on over one month as the optimism from across the pond is catching on over here. | The FTSE 100 has hit its highest level on over one month as the optimism from across the pond is catching on over here. |
| The British equity benchmark has snapped out of the downward trend that it was since early November, and should the positive run continue we could see it hit 7600 before Christmas. | The British equity benchmark has snapped out of the downward trend that it was since early November, and should the positive run continue we could see it hit 7600 before Christmas. |
| The Footsie’s previous record intraday high is 7,598 points, set in June this year. It’s currently trading at 7,556. | The Footsie’s previous record intraday high is 7,598 points, set in June this year. It’s currently trading at 7,556. |
| Financial services group Old Mutual is leading the FTSE 100 risers, up 3.8%, after agreeing to sell part of its investment business to TA Associates in a deal worth £600m. | Financial services group Old Mutual is leading the FTSE 100 risers, up 3.8%, after agreeing to sell part of its investment business to TA Associates in a deal worth £600m. |
| Although shares are rallying, the bond market isn’t as excited by the new US tax reforms. | Although shares are rallying, the bond market isn’t as excited by the new US tax reforms. |
| That may be because bond traders are anticipating a jump in US borrowing in the coming years, as Congress’s tax cuts drive up the deficit. | That may be because bond traders are anticipating a jump in US borrowing in the coming years, as Congress’s tax cuts drive up the deficit. |
| Kit Juckes of Societe Generale explains that bond prices have fallen slightly (pushing up the interest rate, or yield, on US 10-year bonds): | Kit Juckes of Societe Generale explains that bond prices have fallen slightly (pushing up the interest rate, or yield, on US 10-year bonds): |
| A wafer-thin majority is going to be enough to get the US Tax Bill onto president Trump’s desk though first, there’s the 10-hour debate to get through. Sometime tonight/tomorrow, there will be jubilation from those who aren’t gnashing their teeth. | A wafer-thin majority is going to be enough to get the US Tax Bill onto president Trump’s desk though first, there’s the 10-hour debate to get through. Sometime tonight/tomorrow, there will be jubilation from those who aren’t gnashing their teeth. |
| 10-year Note yields have ‘jumped’ to 2.39% and TIPS are at 48bp, so you can almost feel the anticipation in FIC-land (not). | 10-year Note yields have ‘jumped’ to 2.39% and TIPS are at 48bp, so you can almost feel the anticipation in FIC-land (not). |
| The reaction is equity markets is more seasonally-apt, with new S&P/Dow highs and a positive mood in much of Asia. | The reaction is equity markets is more seasonally-apt, with new S&P/Dow highs and a positive mood in much of Asia. |
| [FIC=fixed income (government and corporate bonds) and currencies.] | [FIC=fixed income (government and corporate bonds) and currencies.] |
| IFO believes that German business confidence has been hit by the breakdown in coalition talks. | IFO believes that German business confidence has been hit by the breakdown in coalition talks. |
| But despite this small drop in morale, Germany’s economy has had a bumper year. | But despite this small drop in morale, Germany’s economy has had a bumper year. |
| Ifo ends the year on a high note. Main German surveys remain upbeat in Q4, but flattening betrays some shortness of breath. We expect a 0.6% growth rate in Q4 after Q3's stellar 0.8%. Enough to make 2017 Germany's best growth year since 2011. https://t.co/fT9zo7rOgH pic.twitter.com/schUJUHrsA | Ifo ends the year on a high note. Main German surveys remain upbeat in Q4, but flattening betrays some shortness of breath. We expect a 0.6% growth rate in Q4 after Q3's stellar 0.8%. Enough to make 2017 Germany's best growth year since 2011. https://t.co/fT9zo7rOgH pic.twitter.com/schUJUHrsA |
| Newsflash: German business morale has fallen a little (but remains strong). | Newsflash: German business morale has fallen a little (but remains strong). |
| The monthly business confidence measure, calculated from the IFO institute, dropped to 117.2 this month. That down from November’s record high of 117.6. | The monthly business confidence measure, calculated from the IFO institute, dropped to 117.2 this month. That down from November’s record high of 117.6. |
| German business leaders are a little less optimistic about business expectations, says IFO. | German business leaders are a little less optimistic about business expectations, says IFO. |
| Shocking! The German IFO did NOT reach a new historical high this month, falling by a massive 0.3 point to 117.2 on weaker expectations. | Shocking! The German IFO did NOT reach a new historical high this month, falling by a massive 0.3 point to 117.2 on weaker expectations. |
| America’s Tax Policy Center has analysed the US tax reform package, and shown conclusively that it benefits high earners the most. | America’s Tax Policy Center has analysed the US tax reform package, and shown conclusively that it benefits high earners the most. |
| In the short term, the bill will indeed cut taxes for most Americans -- around 143 million people should pay less next year, while 8.5 million pay more. | In the short term, the bill will indeed cut taxes for most Americans -- around 143 million people should pay less next year, while 8.5 million pay more. |
| For all the talk of helping ‘middle class Americans’ , the benefits will be felt most by those coining at least half a million dollars a year. | For all the talk of helping ‘middle class Americans’ , the benefits will be felt most by those coining at least half a million dollars a year. |
| But that’s the short term impact. Analysts think that tax bills will actually go up in the long term -- as some individual tax changes are not permanent and will expire in 2025. | But that’s the short term impact. Analysts think that tax bills will actually go up in the long term -- as some individual tax changes are not permanent and will expire in 2025. |
| Steve Goldstein of Marketwatch explains: | Steve Goldstein of Marketwatch explains: |
| Things change however once 2025 rolls around. If no change is made, what were tax cuts will become tax hikes, even relative to current law. | Things change however once 2025 rolls around. If no change is made, what were tax cuts will become tax hikes, even relative to current law. |
| A majority of Americans in a decade’s time will then pay higher taxes, including 69.7% of the middle quintile. | A majority of Americans in a decade’s time will then pay higher taxes, including 69.7% of the middle quintile. |
| New distribution analysis of the final tax bill.Millionaires on average will get an extra $69,660 boost. Those with less than $10,000 will get an extra $10 to play with.https://t.co/hOStWMkoaX | New distribution analysis of the final tax bill.Millionaires on average will get an extra $69,660 boost. Those with less than $10,000 will get an extra $10 to play with.https://t.co/hOStWMkoaX |
| European markets have opened higher, with the Stoxx 600 hitting a six-week high. | European markets have opened higher, with the Stoxx 600 hitting a six-week high. |
| In London, the FTSE 100 has gained 14 points to 7551 - less than 50 points away from its all-time high. | In London, the FTSE 100 has gained 14 points to 7551 - less than 50 points away from its all-time high. |
| Connor Campbell of SpreadEx sums up the situation: | Connor Campbell of SpreadEx sums up the situation: |
| Much like on Monday, Tuesday saw little for investors to focus on beyond Trump’s likely tax bill success later this evening. | Much like on Monday, Tuesday saw little for investors to focus on beyond Trump’s likely tax bill success later this evening. |
| Unsurprisingly investors have ignored the nuances of the Republican tax ‘reforms’ – especially the impact it will have on the American middle class – to instead revel in what it means for the nation’s mega-corporations and millionaires. | Unsurprisingly investors have ignored the nuances of the Republican tax ‘reforms’ – especially the impact it will have on the American middle class – to instead revel in what it means for the nation’s mega-corporations and millionaires. |
| Shares in China rose today, as optimism over the looming US corporation tax cuts rippled through the markets. | Shares in China rose today, as optimism over the looming US corporation tax cuts rippled through the markets. |
| The CSI 300 index gained 1.2%, while the Shanghai composite rose by almost 0.9%. | The CSI 300 index gained 1.2%, while the Shanghai composite rose by almost 0.9%. |
| Stocks in Australia also rallied, closing close to their highest level in 10 years, following last night’s record close on Wall Street. | Stocks in Australia also rallied, closing close to their highest level in 10 years, following last night’s record close on Wall Street. |
| Mike van Dulken of Accendo Markets says “fresh optimism that Republicans will pass their highly anticipated tax reform bill into law” has sent equities rallying. | Mike van Dulken of Accendo Markets says “fresh optimism that Republicans will pass their highly anticipated tax reform bill into law” has sent equities rallying. |
| Although it’s billed at a ‘reform’ bill, the tax legislation agreed by Congress will have wider consequences for Americans. | Although it’s billed at a ‘reform’ bill, the tax legislation agreed by Congress will have wider consequences for Americans. |
| My colleague Ben Jacobs explains: | My colleague Ben Jacobs explains: |
| Although Republicans had long hailed tax reform as a way to simplify the United States tax code, it would keep all seven existing tax brackets for individuals and would also add over a trillion dollars to the budget deficit. It also would limit tax deductions for home mortgages and for state and local taxes. | Although Republicans had long hailed tax reform as a way to simplify the United States tax code, it would keep all seven existing tax brackets for individuals and would also add over a trillion dollars to the budget deficit. It also would limit tax deductions for home mortgages and for state and local taxes. |
| The bill also would have a significant impact on policy outcomes outside the tax code. It would end the individual mandate under Obamacare, which requires Americans to buy health insurance or pay a penalty and open up the Arctic national wildlife reserve in Alaska to oil drilling. | The bill also would have a significant impact on policy outcomes outside the tax code. It would end the individual mandate under Obamacare, which requires Americans to buy health insurance or pay a penalty and open up the Arctic national wildlife reserve in Alaska to oil drilling. |
| Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business. | Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business. |
| World stock markets are at record levels today as investors salivate over the prospect of $1.5 trillion of US tax cuts being voted through soon. | World stock markets are at record levels today as investors salivate over the prospect of $1.5 trillion of US tax cuts being voted through soon. |
| America’s House of Representatives is on the brink of passing a major, and controversial, tax reform package. After months of bargaining and brinkmanship, a finalised version of the bill could be approved later today. | America’s House of Representatives is on the brink of passing a major, and controversial, tax reform package. After months of bargaining and brinkmanship, a finalised version of the bill could be approved later today. |
| The package has been heavily criticised for favouring the rich, and driving the US national debt up by another $1.45 trillion. | The package has been heavily criticised for favouring the rich, and driving the US national debt up by another $1.45 trillion. |
| But right now, investors are more excited about the sweeping cuts to corporation tax contained in the package - which look like an early Christmas present to some of America’s big corporations. | But right now, investors are more excited about the sweeping cuts to corporation tax contained in the package - which look like an early Christmas present to some of America’s big corporations. |
| The plan would lower the corporate income tax rate to 21% from 35%, which is likely to give company’s more firepower for dividend payments and share buybacks. | The plan would lower the corporate income tax rate to 21% from 35%, which is likely to give company’s more firepower for dividend payments and share buybacks. |
| Crucially, a lone Republican Senate holdout, Bob Corker of Tennessee, has switched sides and decided to support the package - having previously said it was fiscally irresponsible. | Crucially, a lone Republican Senate holdout, Bob Corker of Tennessee, has switched sides and decided to support the package - having previously said it was fiscally irresponsible. |
| This sent Wall Street rallying to yet another record high last night, pushing the MSCI World index of global stocks to a new level. | This sent Wall Street rallying to yet another record high last night, pushing the MSCI World index of global stocks to a new level. |
| CLOSING BELL: The Dow, S&P 500 and Nasdaq all closed at new records. The Nasdaq flirted with 7,000. pic.twitter.com/E4k2nqghGk | CLOSING BELL: The Dow, S&P 500 and Nasdaq all closed at new records. The Nasdaq flirted with 7,000. pic.twitter.com/E4k2nqghGk |
| The US president was even moved to tweet about it: | The US president was even moved to tweet about it: |
| 70 Record Closes for the Dow so far this year! We have NEVER had 70 Dow Records in a one year period. Wow! | 70 Record Closes for the Dow so far this year! We have NEVER had 70 Dow Records in a one year period. Wow! |
| Most Asian markets have rallied today, spurred by these tax reform hopes. Europe is expected to hold onto yesterday’s gains too. | Most Asian markets have rallied today, spurred by these tax reform hopes. Europe is expected to hold onto yesterday’s gains too. |
| Hussein Sayed, chief market strategist at FXTM, explains why City traders are getting into the festive spirit. | Hussein Sayed, chief market strategist at FXTM, explains why City traders are getting into the festive spirit. |
| December has been historically a good month for equity markets. Many traders bet on the Christmas rally as a seasonal trend to benefit from. Data from 1928 shows that December has been mostly a good month for the S&P 500. It was never the worst performing month and was the best performing month four times. This time, the rally has been fueled by optimism that U.S. lawmakers are on the brink of passing a historic bill to overhaul the U.S. tax code. | December has been historically a good month for equity markets. Many traders bet on the Christmas rally as a seasonal trend to benefit from. Data from 1928 shows that December has been mostly a good month for the S&P 500. It was never the worst performing month and was the best performing month four times. This time, the rally has been fueled by optimism that U.S. lawmakers are on the brink of passing a historic bill to overhaul the U.S. tax code. |
| Getting the Republican Senate fully on board wasn’t an easy task. There’re now also question marks over the ethics of a last-minute addition to the tax bill that gives real estate owners a major tax break. Senator Rob Corker, a deficit hawk who opposed the original Senate tax bill, because it was expected to add $1 trillion to the deficit, appeared to have had a change of heart and provided his full support to the revised legislation. | Getting the Republican Senate fully on board wasn’t an easy task. There’re now also question marks over the ethics of a last-minute addition to the tax bill that gives real estate owners a major tax break. Senator Rob Corker, a deficit hawk who opposed the original Senate tax bill, because it was expected to add $1 trillion to the deficit, appeared to have had a change of heart and provided his full support to the revised legislation. |
| However, the complicated provision doesn’t seem to threaten Republicans’ chances of a success with the vote on the bill later today; with Trump signing it into law this week. | However, the complicated provision doesn’t seem to threaten Republicans’ chances of a success with the vote on the bill later today; with Trump signing it into law this week. |
| The agenda: | The agenda: |
| 9am GMT: Germany’s Institute for Economic Research (IFO) publishes its business confidence index | 9am GMT: Germany’s Institute for Economic Research (IFO) publishes its business confidence index |
| 1.30pm GMT: US housing start figures | 1.30pm GMT: US housing start figures |