US stocks surge as firms await news of Trump's "phenomenal" announcement
President Trump set to approve America's biggest tax reform in decades
by Abi Moses on 10th February, 2017 and updated 10th February, 2017 11:50pm
US stocks reached an all-time high yesterday after President Trump promised a "phenomenal" announcement regarding his tax plan in the coming weeks.
In what has been described as the most ambitious tax reform since the Reagan era, Trump is yet to reveal any specific detail of the proposed reform, but did stress the need for a lower tax burden on businesses during a recent meeting with US airline executives.
Mr Trump said, "Lowering the overall tax burden on American business is big league, that's coming along very well. We're way ahead of schedule, I believe. And we're going to announce something I would say over the next two or three weeks that will be phenomenal in terms of tax."
The Dow Jones Industrial Average closed at a record 20,172.40 up 0.6%, with the blue chips gauge also hit an all-time high earlier in the day, reaching 20,206.36, according to MarketWatch. The biggest winners overall included Wal-Mart, Nike and Goldman Sachs – Goldman Sachs closed up 1.4%.
In the financial sector there were big rises for major corporations Morgan Stanley (+2.2%), Bank of America (+1.8%) and JP Morgan Chase (+1.6%) whilst the cost of crude oil rose to $53 (£42.40) a barrel – an increase of 1.3%.
Kate Warne, investment strategist at Edward Jones, told CNCB, "I think it's a combination of investors feeling more confident that some tax package will get worked on. But I think that we also have lower interest rates recently and solid earnings."
President Trump's comments, were simply reinforcements of the promises made during his election campaign, so although the tax reforms aren't unexpected, they are certainly a welcome change from seemingly constant negativity surrounding his immigration plans and America's trade relationship with China.
A sentiment shared by many, including Boston Private Wealth's chief marketing strategist, Robert Pavlik. Mr Pavlik claimed, "Those comments about taxes, the markets have been looking forward to that for a while, and that helps. At least we're not talking about Ivanka [Trump]'s dress line over at Nordstrom's."
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