NEW YORK: Wall Street stocks pushed to fresh records Friday as key congressional holdouts on a US tax cut proposal signaled their support, pushing the long-awaited measure closer to the finish line.
All three major US equity indices rocketed to all-time highs as Republican leaders appeared poised at last to hand President Donald Trump a major win.
The progress on the tax bill also boosted the dollar. Equity markets elsewhere were mixed, with London and Frankfurt rising and Paris and Tokyo pulling back.
After a week filled with announcements by major central banks, markets’ attention refocused on Capitol Hill after Thursday when US stocks fell on reports that Republican Senator Marco Rubio threatened to oppose the tax cut measure.
But party power brokers tweaked the proposal to satisfy Rubio’s demand that it benefit more middle- and low-income taxpayers.
Republican Senator Bob Corker, who opposed an earlier version of the proposal, also said he would support the final measure.
“As the progress continues, this is a market that continues to reward that progress,” said Art Hogan, chief market strategist at Wunderlich Securities.
“This feels like there’s a lot of enthusiasm about tax reform getting to the endzone.”
Since President Donald Trump was elected last year, Wall Street has viewed tax reform as Washington’s biggest priority because it would immediately boost corporate profits and was seen as a means to generate faster economic growth.
The bill has progressed in Congress without support from Democrats and some polls have shown weak public support for the measure, in part because of charges that it is a giveaway to the rich that could explode the deficit.
The momentum behind tax reform also helped lift the dollar.
The greenback’s upward move was especially strong against the British pound, which tumbled against major currencies as European Union leaders agreed to open the next stage of Brexit talks, which are expected to be tough.
“The formal shift from phase 1 to phase 2 of negotiations between the UK and EU only intensified the pound’s Brexit migraine this Friday,” said Connor Campbell of Spreadex Ltd.
“What we just went through was meant to be the easy part,” Campbell added.
“Now, the UK heads into the New Year facing an ‘even tougher’ (Angela Merkel) and ‘significantly harder'(Jean-Claude Juncker) set of Brexit talks, as the country tries to work out what its future trade relationship will look like with the EU while desperately seeking avoid a ‘no deal’ scenario by the 29 March 2019 divorce deadline.”
Key figures around 2200 GMT , (6am Malaysia time)
New York – DOW: UP 0.6 % at 24,651.74 (close)
New York – S&P 500: UP 0.9 % at 2,675.81 (close)
New York – Nasdaq: UP 1.2 % at 6,936.58 (close)
London – FTSE 100: UP 0.6 % at 7,490.57 (close)
Paris – CAC 40: DOWN 0.2 % at 5,349.30 (close)
Frankfurt – DAX 30: UP 0.3 % at 13,103.56 (close)
EURO STOXX 50: UP 0.1 % at 3,560.53
Tokyo – Nikkei 225: DOWN 0.6 % at 22,553.22 (close)
Hong Kong – Hang Seng: DOWN 1.1 % at 28,848.11 (close)
Shanghai – Composite: DOWN 0.8 % at 3,266.14 (close)
Euro/dollar: UP at US$1.1755, (RM4.80) from US$1.1776
Pound/dollar: DOWN at US$1.3323 from US$1.3431
Dollar/yen: UP at 112.63 yen (RM4.08) from 112.34 yen
Oil – Brent North Sea: DOWN 8 cents at US$63.23 per barrel
Oil – West Texas Intermediate: UP 26 cents at US$57.30 per barrel — AFP
Source: The Sun Daily