In the US the dollar listed and fell as the reality of Republican tax reform, a core part of Donald Trump’s election pledge, faced fatigue today. How soon? By how much? Can he really deliver? Many Americans would like big business to pay more tax, not less according to new research from the Pew Center (read here).
The dollar spot price fell -0.28% to 93.1 as investor faith was sapped, feeding the euro and pound higher, both up between +0.32 and +0.34% at 4pm. Back in London Theresa May was in full flight defending free market capitalism and attacking “unfunded borrowing and significantly higher levels of taxation…would damage our economy, threaten jobs, and hurt working people”.
The Prime Minister was on the offensive, attacking Jeremy Corbyn’s Labour Party Conference speech yesterday when Corbyn claimed Labour represented the “mainstream” and that the Tories had lost direction.
Shares weren’t overwhelmed by May's paean to the free market with the FTSE 100 climbing just six points to 7,319.5 with CRH up +2.74% and Ferguson up +2.58%. However Land Securities Group fell hard, down -6.4%; elsewhere changes to broker ratings stirred shares somewhat on the FTSE 250, itself up 110 points at 19,678.
- UK FTSE 100 7,319.5 +0.08%
- Dow 22,335.87 -0.02%
- S&P 500 2,505.90 -0.05%
- Nasdaq 6,443.47 -0.15%
- Nikkei 225 20,363.11 +0.47%
- DAX 12,697.17 +0.32%
- CAC 40 5,285.30 +0.06%
- Gold 1,285.20 -0.20%
- Oil WTI 52.38 +0.46%
Oil prices rise again – correction due? Jaguar quits Bridgend early
Oil prices saw further gains today with Brent Crude rising almost +0.70% at one point to more than $58.30. Some of the lift was due to the Kurdistan independence vote; the Kurdistan area of Northern Iraq exports more than 500,000 barrels of oil a day.
While the oil market seems to be giving the impression of more tightening US production is beginning to return to normal and will continue to build in coming weeks. How long for a correction?
On top of the Bombardier jobs worry more negative news: Jaguar is speeding up the end date by three months of engine production at Ford’s Bridgend plant. It’s thought production may probably switch to JLR’s Wolverhampton plant after 2020; around 1,100 jobs will be affected in total.
"The grim future for Ford Bridgend," said Unite Wales secretary Andy Richards, "has again today been brought into clear focus. What is of crucial importance now is that all interested parties work night and day to secure alternative future work for Ford Bridgend."
However Ford’s Dagenham plant is not impacted by the news; Dagenham will continue to build JLR diesel engines, though that existing contract expires in 2019.
Lastly, it emerged later this afternoon that US growth was higher in the second quarter than originally stated. The rise is not huge, from +3% to +3.1%, but right now Donald Trump needs all the positive news he can get.
Some state expenditure boosted the numbers as well as consumer spending. However weakness is anticipated for the third quarter as the combined impact of Hurricanes Harvey and Irma make their presence felt across retail sales and industrial production.
Breaking news: Rescue talks for private wholesaler Palmer & Harvey have begun with several parties.