Sharechat Logo

While you were sleeping: Wall St pauses amid tax bill vote

Wednesday 20th December 2017

Text too small?

Wall Street fell from record highs as investors eyed whether the Republican tax bill, set to cut corporate tax rates, will clear enough votes in the House and the Senate to land on US President Donald Trump’s desk. 

“The market really has been trading in lock-step with the progress that’s being made,” Art Hogan, chief market strategist at B Riley FBR, told Bloomberg. “Any pause we’re taking today is sort of taking a deep breath to see if we get across the goal line.”

In 1.44pm trading in New York, the Dow Jones Industrial Average slipped 0.05 percent, while the Nasdaq Composite Index declined 0.4 percent. In 1.28pm trading, the Standard & Poor’s 500 Index fell 0.2 percent. 

US Treasuries also dropped, sending the yield on the 10-year note seven basis points higher to 2.46 percent.

Companies across all industries and sectors would pay an average effective tax rate of 9 percent next year under the Republican tax-overhaul bill, Bloomberg reported, citing a Penn Wharton Budget Model study released on Tuesday. By 2027, that average effective rate would double to 18 percent because of some corporate tax breaks that would move off the books, according to the study.

“Obviously there is high confidence that it will get passed, but there is a very narrow margin for error, within the Senate especially. So there’s a little bit of a pause to see what’s going to happen,” Chris Zaccarelli, chief investment officer of Independent Advisor Alliance in Charlotte, North Carolina, told Reuters. 

At Monday’s close, 30 percent of the companies in the S&P 500 traded above their average analyst price target, Bloomberg reported, citing data compiled by Strategas Research Partners, meaning that those stocks have already climbed to levels where they’re expected to be 12 months from now.

The Dow moved lower as declines in shares of Apple and those of General Electric, down 0.9 percent and 0.8 percent respectively, outweighed gains in shares of Wal-Mart and those of Home Depot, both recently up 1 percent.

Apple shares fell as broker Instinet downgraded the stock to “neutral,” from “buy,” because of the outlook for iPhone X sales. 

"We induce from muted iPhone X promotions that demand is likely to be in line with Apple's expectations for Q1," Jeffrey Kvaal, a technology analyst at the New York City-based brokerage, said in the note, according to media reports.

Meanwhile, a Commerce Department report showed US housing starts advanced more than expected in November, bolstered by single-family home building which climbed to the highest level in a decade.

In Europe, the Stoxx 600 Index finished the session with a 0.4 percent drop from the previous close. France’s CAC 40 Index fell 0.7 percent, while Germany’s DAX Index also closed 0.7 percent weaker.

The UK’s FTSE 100 Index eked out a 0.1 percent gain.


  General Finance Advertising    

Comments from our readers

No comments yet

Add your comment:
Your name:
Your email:
Not displayed to the public
Comments to Sharechat go through an approval process. Comments which are defamatory, abusive or in some way deemed inappropriate will not be approved. It is allowable to use some form of non-de-plume for your name, however we recommend real email addresses are used. Comments from free email addresses such as Gmail, Yahoo, Hotmail, etc may not be approved.

Related News:

NZ dollar steady ahead of RBA speech, NZ rate decision
Govt plans to clamp down on unfair commercial practices well received
Loyalty scheme members not exclusive customers, fuel inquiry hears
S&P raises UDC Finance's credit rating to 'BBB+'
Company loses $270m claim over infant formula factory
ANZ ties $50m loan for Synlait to environment, social and governance measures
Tower to raise $47.2m at a discount to buy Youi, bolster balance sheet again
Summerset moving ahead with Australian expansion plans
24th September 2019 Morning Report
NZ dollar pares losses ahead of RBNZ rate decision

IRG See IRG research reports