The late pulling of the Republican “Affordable Health Care Act” saw US equity markets pare gains on Friday as indices closed mostly lower. Although the tech-focused Nasdaq once again outperformed to finish higher, both the Dow Jones and S&P 500 closed weaker as Goldman Sachs weighed on the former while the latter suffered its worst weekly performance since Donald Trump’s November election.
Accendo Markets Analyst, Mike Van Dulken shared his thoughts on Trump’s Healthcare bill – “While it puts into doubt ease of passage for other stimulus measures it could actually allow the new government proceed more quickly with the pro-growth infrastructure spending, deregulation and tax cut trio that have fuelled a 4-month global reflation rally.”
This knock in confidence, however, has made itself felt by the markets this morning. The FTSE dropped more than 60 points, slipping to a 2 and a half week, sub-7300 low; while the DAX and CAC fared no better, falling below 12000 and 5000 respectively, shedding between 0.8% and 0.9%.
Spreadex Analyst Connor Campbell commented – “It wasn’t just the European indices that suffered. The normally dominant dollar dropped like a stone after the bell, falling half a percent against the pound and 0.7% against the euro. That leaves cable at its highest point in over a month, while the euro-dollar is at its best level since last November.”
In focus this morning will be any fallout from the 11th hour withdrawal of the US Healthcare bill on Friday night, putting a 4-month global Trump trade rally into question, as well as the run-up to Wednesday’s triggering of Article 50 to officially kick off the UK’s divorce proceedings with the EU.
On the data front, German IFO Surveys are seen largely flat with Business Climate clinging to 3yr highs of 111, while Eurozone M3 Money Supply holds firm at 4.9%.