While you were sleeping: Trump budget relief

Wednesday 24 May 2017 07:55 AM

While you were sleeping: Trump budget relief

By Margreet Dietz

May 24 (BusinessDesk) - Wall Street moved higher amid initial relief about US Donald Trump’s budget plan.

"There were no large surprises. The market is pleased with that,” Wade Balliet, chief investment strategist at Bank of the West, told Reuters.

In 3.27pm trading in New York, the Dow Jones Industrial Average rose 0.2 percent, while the Nasdaq Composite Index eked out a 0.03 percent gain. In 3.12pm trading, the Standard & Poor’s 500 Index advanced 0.2 percent.

The Dow rose, led by gains in shares of Goldman Sachs and those of JPMorgan Chase, up 2.1 percent and 1.5 percent respectively. Bucking the trend were shares of Home Depot and those of Walt Disney, recently down 0.7 percent and 0.5 percent respectively for the biggest percentage drops in the Dow.

A Commerce Department report showed new home sales sank 11.4 percent to a seasonally adjusted annual rate of 569,00 units in April, compared with an upwardly revised 642,000 units in March. While that was a bigger slide than economists had expected, the outlook for the housing market remains solid.

"Demand for housing remains strong and the usual list of support factors hasn't changed, with the key items being job growth and wage gains," Jennifer Lee, a senior economist at BMO Capital Markets in Toronto, told Reuters.

Indeed, fed fund futures showed that traders are cementing bets that the Federal Reserve will raise interest rates next month, according to Bloomberg.

Minutes from the Fed’s May 2-3 meeting, slated for release on Wednesday, will be scoured for fresh clues on the timing and pace of rate hikes.

Meanwhile, shares of Bunge soared, up 15.8 percent as of 3.28pm in New York, after Glencore said it “made an informal approach to Bunge Limited regarding a possible consensual business combination.”

“Discussions may or may not materialise and there is no certainty that any transaction will occur,” Glencore said in the statement.

In Europe the Stoxx 600 Index ended the day with a 0.2 percent gain from the previous close. Germany’s DAX Index rose 0.3 percent, while France’s CAC40 Index climbed 0.5 percent.

The UK’s FTSE 100 Index fell 0.2 percent.

Germany, the euro-zone’s largest economy, offered fresh reasons to be optimistic about the region’s outlook. Separate reports showed that the nation’s economic growth increased to 0.6 percent in the first quarter, while business confidence as measured by the Ifo institute climbed to 114.6 in May, the highest level in more than 25 years.

Oil prices rose amid fresh indications that OPEC and its partners are likely to extend production cuts for another nine months when they meet on Thursday in Vienna.

"Six and nine months are both proposals on the table ... we will support the majority, probably the nine months," Ecuador Oil Minister Carlos Perez told reporters after arriving in Vienna on Tuesday, according to Reuters.

(BusinessDesk)

ends

© Scoop Media