Monday November 13th

13-11-2017

Stock futures fall as Wall Street worries about getting tax reform done this year

U.S. stocks futures pointed to a weak open Monday with investors worried that a corporate tax cut may not arrive in 2017. Dow Jones industrial average futures fell 80 points, while S&P 500 and Nasdaq 100 futures slipped 7.25 points and 24 percent, respectively. Market sentiment has been on edge as of late, after news emerged that a corporate tax cut from 35 percent to 20 percent could be delayed until 2019. This is in contrast with a House bill that, if passed into law, would slash the corporate rate immediately. The House wants to vote on its bill this week. "As the tax debate intensifies, investors are becoming more skeptical" that lower corporate taxes will arrive this year, said Peter Cardillo, chief market economist at First Standard Financial. "I think the market is caught in a reality check right now." Equities had rallied to record highs amid renewed hope that the GOP-led Congress, along with the Trump administration, would be able to move forward with tax reform this year. Elsewhere, there are no major economic data set for release Monday, but investors are looking ahead to key inflation data due later in the week. Earnings rolled again Monday, with Tyson Foods and JD.com reporting quarterly results before the open. Switch is set to report after the bell. Overseas, European markets fell broadly. The Stoxx 600 index, which is made up of a broad swath of European equities, fell 1 percent, while markets in Asia finished mostly in the red. The Nikkei 225 fell 1.32 percent, or 300.43 points, to close at 22,380.99 — its lowest close since October 31. Across the Korean Strait, the Kospi edged down 0.5 percent to end at 2,530.35. Greater China markets proved to be a bright spot in the region. The Hang Seng Index rose 0.32 percent by 3:00 p.m. HK/SIN. On the mainland, the Shanghai Composite rose 0.47 percent to finish the session at 3,448.68 while the Shenzhen Composite edged up 0.30 percent to close at 2,045.18. Oil was largely steady on Monday, trapped between a bullish push from tension in the Middle East and downward pressure from evidence of rising U.S. production, although record fund bets on a rally kept the price in sight of two-year highs. Brent crude futures were down 8 cents at $63.44 a barrel by 8:46 a.m. ET (1246 GMT), having gained 14 percent so far this month. U.S. West Texas Intermediate (WTI) crude rose 10 cents to $56.84. Gold recouped some of the previous session's sharp price drop on Monday as uncertainty over a U.S. tax reform plan stoked risk aversion, pulling equities from their recent record highs. However, prices remained hemmed in a narrow range as investors awaited more clues on the path of U.S. interest rates. Spot gold was up 0.2 percent at $1,278.40 an ounce, while U.S. gold futures for December delivery were up $4.70 an ounce at $1,278.90.