US equity markets slipped at their close yesterday as Trump’s tax proposals disappointed investors, dashing hopes that the President’s economic council would offer some surprises alongside the pre-announced tax plan. The Dow Jones closed 0.1% lower, as disappointing Q1 figures for Procter & Gamble offset gains from Verizon and United Technologies, while the S&P 500 closed just over a point shy of break-even and the Nasdaq once again outperformed, closing flat around recent record highs.
Accendo Markets Analyst, Mike van Dulken commented – “US bourses closed lower, disappointed with an underwhelming Trump tax announcement, and Asian stocks had a lacklustre session overnight as a consequence. Nice ideas, but far from a done deal, merely adding to investor frustration about the lack of progress on all those election pledges that helped fuel risk appetite and markets to recent highs.”
The FTSE was the worst hit of the European bourses this morning. Spreadex Analyst, Connor Campbell noted – “The UK index dropping 0.6% due to a mixture of commodity losses and weakness in the face of the pound’s near 7 month high against the dollar, sterling tickling 1.29 after a 0.4% rise. The Eurozone indices fared a bit better, though the DAX and CAC still fell by 0.3% apiece ahead of this afternoon’s ECB meeting – something that admittedly may be of more interest to the French-election boosted euro.”
This afternoon, Mario Draghi’s comments on the back of the ECB Rate Decision today will dictate the Euro’s outlook for the short-term.
ADS Securities Analyst, Konstantinos Anthis suggested – “If the ECB President, as expected, attempts to talk down the Euro it will be interesting to see whether traders will jump on the opportunity to sell the currency against the weakened Dollar. The first level to focus will be the 1.0850 support area which caps any losses in the short term especially since the Dollar is not in demand at right now. However, a heavily dovish Draghi could spur investors into taking profits off the table and if stops start getting tripped below the 1.0850 support then the euro could drive lower towards 1.0750.”
Over in the US, Q1 earnings season continues with results from the likes of Alphabet, Amazon, American Airlines, Dow Chemical, Expedia, Ford, Intel, J&J, Microsoft, Starbucks, Under Armour and UPS.