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Stocks mixed as traders await US tax re-vote

market relief

market relief

European equity markets are subdued this morning after the US House of Representatives voted in favour of the proposed tax reforms, but will need to vote again due to a procedural snag at the US House of Representatives. 

The re-vote is expected to take place today, and is likely to be approved again. Equity markets have been strong lately in the hope the US government would approve the new changes to the tax system, and now it appears the buying pressure has run out of steam.

Carillion has brought forward the start date of the new CEO Andrew Davies from 22nd April to 22nd January. Mr Davie has been the CEO of Wates Group, a family-owned construction company, since 2014, and last year the company boasted a 20% rise in revenue. Mr Davies is being drafted in to Carillion to turnaround the troubled construction company, and the share price is up 3%.

Shares in Low & Bonar are down 19% after the company announced the departure of its CEO Brett Simpson. Trudy Schoolenberg has been appointed as interim CEO with immediate effect.  

EUR/USD is largely unchanged today as volatility remains low. The US dollar has barely moved as traders are still waiting for the re-vote by the US House of Representatives on the tax reforms. German PPI on a year-on-year basis came in at 2.5%, and that was a slight drop from the October reading of 2.7%.

GBP/USD is also broadly flat on the day as traders await the update from Mark Carney, the Governor of the Bank of England at 1.15pm (UK time). Mr Carney is due to testify before Treasury Select Committee as a part of the Financial Stability Report. Mr Carney will be questioned about the health of the British banking system, and is likely to be discussing the ‘hard-Brexit’ scenario.  

At 3pm (UK time) the US will announce the existing home sales for November, and the consensus is for 5.52 million, down from 5.48 million in October.

We are expecting the Dow Jones to open up 92 points at 24,846, and we are calling the S&P 500 up 7 points at 2688.


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