US markets have come to life ahead of the Trump tax announcement.
The Dow Jones Industrial Average is now up 67 points and is just 100 points shy of its record high of 21,169 hit on 1 March this year. If the market likes what it hears from Trump’s administration, that barrier could soon be breached.
Meanwhile Nasdaq, which did hit a record high on Tuesday, has edged higher, with many of its technology constituents likely to benefit from the tax changes. Joshua Mahony, market analyst at IG, said:
Global markets have continued in a buoyant mood today, thanks to optimism about the impending tax reforms in the US. Despite a significant degree of political uncertainty still evident in Europe, there is a feeling that worst is over, with markets instead focusing on the Trump trade coming back into play.
Unlike other more nuanced political and economic changes, a huge corporate tax cut would make a huge difference to the bottom line of US-based businesses. For investors, this impending shift in profitability is a huge attraction to invest in the US, and hence the outperformance of the American markets relative to Europe.