Tag Archives: Trump

Trump’s Promise For Tax Reforms Help The US Stocks To Surge

Earlier, when Donald Trump assumed his office at the White House, he had promised to bring tax reforms. In his meeting with large corporations, Trump said that the new administration will focus on deregulating and reforming taxes. Bringing down business taxes will encourage the companies to invest more in the US, thereby bringing new jobs to the country. The investors are delighted by the prospect of industrial and economic growth. As a result, the US stocks surged in value for the first time since December.

Similar improvement was also seen in the equity markets of Asia and Europe. The MSCI All-Country World Index reached its highest level since 2015 June. The dollar also gained positively during the week ending with a weekly gain. The gold price and Treasuries retreated on the other hand. Crude which was experiencing a rally since the OPEC deal also finished on a high note for the third consecutive day.

The stocks have been having a hard time since the immigration ban. The political uncertainty kept the investors on their toes and the stocks suffered. President Trump has promised to introduce new trade deals to improve the economy and this has helped the US stocks. The increase in election risk in Europe also gave a major blow to the stocks. As the Trump White House has promised some phenomenal plan to cut down business taxes in two to three weeks, the investors have gained interest once again.

The investors believe that the future for the US is positive and this has impacted the equity markets all over the world. Currently, the corporate tax is roughly 35%. President Trump has promised massive cuts on business taxes and this means that the tax could come down to around 20%. This will greatly improve the earnings of businesses in the USA. He has also promised the corporations to remove restrictions on regulations so that the companies can build new plants and bring the production to the USA. This will reduce the unemployment rate even further. The economic growth is signaled by the already declining unemployment claims.

The US dollar which was gaining significantly after the November election has been declining since the beginning of this year. Now, the positive outlook on US economy has helped dollar to gain against yen and it has reached its highest value in 10 days. The US dollar also gained against a basket of currencies. Major tax reforms plans have helped dollar to gain against international currencies.

The leaders from USA and Japan are set to meet shortly and some important changes in the deals are expected to be made. Trump will express his concern about a strong dollar against yen and investors expect some announcement pertaining to investment and trade deals. The protectionist policy of the Trump White House resulted in the decline of the dollar, which is picking up in hopes of new development. The dollar index gained 0.2% and it also gained 0.5% against the Japanese Yen.