Wall Street closed in the green on 4th January 2018 with all 3 main indices touching record highs. Investors optimism over the economy has improved after the ADP report showed US companies hired 250,000 workers in December 2017, the most jobs in last 9 months and beating expectations of 190,000. The Dow Jones gained 152 points to 25075. The S&P 500 advanced 11 points to 2724. The Nasdaq climbed 12 points to 7078. It took less than a year for the Dow to add a 5,000-points milestone, which is the fastest since the index was created in May 1896. Proposed tax rate cut from 35% to 20% would boost profitability and margins for many of the U.S companies, tax rate cute enthusiasm helped the U.S stock markets to reach new record highs post 2016 U.S Presidential Elections.
A strong US Economy and markets bodes well for the world markets and our own Sensex and Nifty too. Indian Market participants are keenly waiting for Q3Fy18 results & Union Budget (2018-19). Strong economic data from developed nations will have a positive impact on developing nations like India, in economic terms it is termed as Multiplier Effect.
The US economy saw impressive economic data this year, which resulted in building up expectations of further growth in the economy; private sector has added 250,000 jobs in November 2017, the highest in the last 9 months and unemployment rate in US hit 4.1% for the first time since February 2001. On top of it all, in the recent FOMC policy meeting, Fed hiked interest rates by 25bps (December 2017) and signalled more rate hikes in the year 2018 suggesting Fed confidence in the economy.
The US economy advanced 3.2% in Q3 of 2017, up from 2.3% in the previous period and better than a 3% in the second estimate. It is the highest growth rate in two years.