Key world stock markets dipped yesterday after a three-day rally in the wake of a largely expected US tax cut plan, while the euro weakened after comments from European Central Bank president Mario Draghi.
On Wall Street, stocks edged lower after a lukewarm reception for US President Donald Trump’s tax plan unveiled on Wednesday, some of the details of which were largely expected by investors.
The plan proposes deep US tax cuts, many for businesses, that would make the federal deficit balloon if enacted. The market now is waiting to see if the proposal will become law.
“It is getting to the point, this may be the last sort of hurrah for the hope trade – the announcement of the tax cut,” said Tom Siomades, head of the Investment Consulting Group of Hartford Funds, in an interview with Reuters, referring to the stock market rally in the wake of Mr Trump’s election.
However, losses on Wall Street yesterday were curbed as corporate earnings continue to show strong results for the quarter. Comcast was the top boost to the benchmark S&P 500 index after its results.
US economic data showed new orders for key US-made capital goods rose less than expected in March, but a second straight monthly increase in shipments suggested business investment accelerated in the first quarter.
The Dow Jones Industrial Average fell 11.39 points, or 0.05 per cent, to 20,963.7, the S&P 500 lost 1.11 points, or 0.05 per cent, to 2,386.34 and the Nasdaq Composite added 16.81 points, or 0.28 per cent, to 6,042.04.
Europe’s main bourses fell as much as 0.5 per cent as traders pulled back after a six-session winning streak on relief at the outcome of the first round of France’s presidential election and encouraging earnings.
The pan-European FTSEurofirst 300 index lost 0.21 per cent and MSCI’s gauge of stocks across the globe shed 0.15 per cent to retreat from a record.
As widely expected, the ECB made no changes to its record low interest rates or stimulus program, but euro zone government bond yields and the euro fell after Mr Draghi said policymakers did not discuss removing the bank’s easing bias on monetary policy at this month’s meeting.
The benchmark 10-year Bund yield was last down almost five basis points at 0.302 per cent. The euro was down 0.34 per cent to $1.0866 against the dollar.
Oil prices retreated after news that two key oilfields in Libya had restarted, pumping crude for export into an already bloated market.
Yesterday, United States crude oil fell 2.5 per cent to $48.38 per barrel and Brent was last at $51.12, down 2.46 per cent on the day.