European stocks rallied strongly on Monday after the U.S. Senate passed a tax package delivering significant fiscal stimulus, which investors have been anticipating would give extra legs to the bull run in equity markets. The U.S. Senate voted in the early morning hours on Saturday to pass the tax reform bill. Wall Street is most excited about the provision to lower the corporate tax rate from 35% to 20%, which it expects would be a boon to Corporate America and a positive for an already historically high stock market. The tax overhaul delivered some relief in early European trading after benchmarks hit multi-week lows on Friday. Strong gains in the U.S. dollar helped Germany’s dollar-exposed DAX shoot up from a two-month low, last up 1.1 percent. The euro’s strengthening has weighed on earnings expectations for stocks across the euro zone this quarter. The Dax decided to ram the doors open on the first trading day of the week, hammering the 13’040 mark at opening and ramping up to the 13106 point mark booking a 1,95% increase. One hour before opening the German DAX is only quoting positive returns with the biggest Loser being ProSiebenSat1 increasing its market cap by 0,15%. The biggest Winner on the German Index is Fresenius Medical Care KGaA. After opening at 84 Euro, the stock rose to a half-year high at 87,18 Euro and is now quoting at 86,84.
The most recent five-day stretch of trading on Wall Street was an exciting one for those long equities. For starters, the Dow Jones Industrial Average used a couple of notable advances to blow past the 24,000 mark. On Friday, it was a rollercoaster ride for the investment community, with some sharp reversals in the direction of trading during the seesaw session. In addition to the tax reform hopes, trading was driven by the decision of General Michael Flynn to plead guilty to a lesser charge in Federal Court, which many pundits think will have him talk about the Trump Administration’s alleged dealings with Russia. The Flynn news spooked the market after a strong start to the session, but the losses were pared significantly into the closing bell when it was looking more likely that Senate Republicans would have enough votes to pass its tax reform plan. For the day, the Dow Jones Industrial Average, the NASDAQ, and the broader S&P 500 Index were down 41, 26, and five points, respectively. The small and mid-cap sectors also finished lower, but it was not a clean sweep for the bears, as there were more winning than losing stocks on the Big Board. Most of the damage was done by the NASDAQ, where decliners outnumbered advancers by a comfortable margin. The industrial and technology sectors were the notable laggards, while the energy group was very much in favor. The remaining groups among the 10 major equity groups did not finish the session too far removed from the neutral line. Notwithstanding Friday’s setback, the equity market entered the final month of 2017 with a chance to make history. If the major equity averages were to finish the 31-day stretch in positive territory, it would be the first time since the inception of the stock market that it finished higher during each month of the year. The bulls will certainly be emboldened if Congress can get a tax reform bill on President Trump’s desk for him to sign into law before year’s end. Too, there could be another Santa Claus rally on the horizon, especially with a strengthening U.S. economy making a case for investors to put more money into stocks. The investment community also seems to have already factored into its valuations the likelihood the Federal Reserve will tighten the monetary reins by 25 basis points at it two-day monetary policy meeting next
Investors will begin the first full trading week of December with some M&A news. The lead headline is the agreement in place for pharmacy giant CVS Health to acquire insurance provider Aetna. Under the terms of the $69 billion deal, which may reshape American health care, Aetna shareholders would receive approximately $207 per share, consisting of $145 per share in cash and 0.8378 of share of CVS stock for each share held. Meantime, reports surfaced that Broadcom plans a hostile takeover of Qualcomm after the latter rebuked past attempts to work out a deal between the two technology giants. Specifically, Broadcom now plans to nominate a slate of 11 independent members to the board of Qualcomm after the semiconductor company rejected its $103 billion cash-and-stock bid last month.
On Monday Morning the Dow Jones is rallying up at 24522 point after breaking the 24000 point mark on Friday. Some of the biggest gainers included bank and industrial stocks. Bank of America and JPMorgan rose more than 3 percent, while Caterpillar and Boeing gained about 2 percent. One hour after opening the Index has gained 280 points.
Sir of Finance 