Equities in major markets touched a record for a third straight session yesterday as US shares rose on strong earnings and the prospect of tax cuts, while the euro pulled back after two days of strong gains.
Treasury Secretary Steve Mnuchin, who is leading US President Donald Trump’s effort to craft a tax package that can pass Congress, described the plan as the “the biggest tax cut” in US history and said he hoped it would attract broad support.
“We have a pretty good idea that Trump is targeting lower corporate taxes, lower individual taxes and a simplification of the process, but all that is in an ideal world,” said Andre Bakhos, managing director at Janlyn Capital in Bernardsville, New Jersey.
Thermo Fisher Electron, up 4.4 per cent, and Edwards Lifesciences, up 9.5 per cent, were the biggest boosts to the benchmark S&P 500 index after results.
The Dow Jones Industrial Average rose 33.93 points, or 0.16 per cent, to 21,030.05, the S&P 500 gained 5.04 points, or 0.21 per cent, to 2,393.65 and the Nasdaq Composite added 5.39 points, or 0.09 per cent, to 6,030.88.
European shares are at 20-month highs during a three-day rally sparked by centrist Emmanuel Macron’s win in the first round of French presidential elections, which considerably reduced the risk of a French exit from the single currency.
Higher-than-expected earnings also helped European stocks reverse early falls and move higher. The pan-European FTSEurofirst 300 index rose 0.46 per cent, to touch its highest level since August 2015. MSCI’s gauge of stocks across the globe gained 0.17 per cent after hitting a high of 456.97, to set a record for a third straight session.
Overall, first-quarter earnings for STOXX 600 companies were expected to rise 5.5 per cent, according to Thomson Reuters data. In comparison, S&P 500 companies in the US are expected to show 11.4-per cent earnings growth expected for quarter.
The euro was down 0.46 per cent to $1.0875 after strengthening by more than two per cent in the prior two sessions in the wake of the first round of French elections. The threat of a US government shutdown this weekend also receded after Trump backed away from demanding that Congress include funding for his planned border wall with Mexico in a spending bill.
US Treasury prices were little changed ahead of the tax announcement after paring steep losses sustained in the last few sessions. Benchmark 10-year notes last rose 2/32 in price to yield 2.3215 per cent, from 2.329 per cent late on Tuesday.
Oil prices reversed course and turned higher after data from the US Energy Information Administration showed a bigger-than-expected draw in crude inventories.
US.crude rose 0.69 per cent to $49.90 per barrel and Brent was last at $52.14, up 0.08 per cent on the day.