US stocks retreat as Senate unveils tax plan

November 10, 2017

By IFCMarkets

Dow snaps 7-session winning streak

US stocks retreated on Thursday on tax cuts delay possibility. The dollar weakened as the Senate’s tax plan was unveiled: the live dollar index data show the ICE US Dollar index, a measure of the dollar’s strength against a basket of six rival currencies, fell 0.5% to 94.51. Dow Jones industrial average lost 0.4% to 23461.94, snapping seven session win streak. The S&P 500 pulled back 0.4% to 2584.62 led by industrial stocks. The Nasdaq composite index dropped 0.6% closing at 6750.05.

Treasury yields declined after Senate tax plan details revealed it would delay lowering corporate tax cuts to 20% until 2019 instead of 2018 as proposed by House Republicans. Concerns were alleviated after the House Ways and Committee passed the Republicans’ bill which proposes cutting corporate taxes to 20% from 35%, repeals the estate tax and revises the existing seven tax brackets into four. House Republicans’ bill would increase the deficit by $1.7 trillion over a decade, beyond the $1.5 trillion required to meet Senate rules under the recently passed budget, according to the Congressional Budget Office. In economic news jobless claims rose by 10 thousand to 239 thousand, and a reading on wholesale inventories for September showed a 0.3% gain.

European stocks pull back on disappointing earnings updates

European stocks pulled back on Thursday on weaker than expected earnings updates. Both the euro and British Pound climbed against the dollar. The Stoxx Europe 600 index lost 1.1%. Germany’s DAX 30 fell 1.5% to 13182.56. France’s CAC 40 ended 1.2% lower and UK’s FTSE 100 retreated 0.6% to 7484.10. Indices opened mixed today.

Euro was supported by the European Commission estimate the euro-zone economy is on track to grow at its fastest rate in a decade in 2017, bolstered by robust job creation, rising investment and decreasing debt. German statistics agency Destatis’s report German exports and imports declined at the end of the third quarter weighed on DAX index.

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Asian markets slip

Asian stock indices are mostly lower today as market sentiment was undermined by losses on Wall Street overnight.Nikkei lost 0.8% to 22681.42 as yen advanced against the dollar. Chinese stocks are mixed: the Shanghai Composite Index is 0.2% higher while Hong Kong’s Hang Seng Index is down 0.1%. Australia’s All Ordinaries Index is down 0.3% as Australian dollar pared previous day gains against the greenback.


Oil lower

Oil futures prices are edging lower today on rising US output concerns with increases in shale oil production on higher price incentives. Prices rose yesterday on rising geopolitical concerns after a report Saudi Arabia has urged its nationals to leave Lebanon immediately. Brent for January settlement rose 0.7% to end the session at $63.93 a barrel on Thursday.

Market Analysis provided by IFCMarkets

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