Market Snapshot – Risky Assets Move Higher on Tax Bill Anticipation

Markets Are Strong and Steady

The markets are generally in a buoyant mood as a carry over of what had happened last week on Friday in the markets. The tax reform bill in the US is progressing in a strong and smooth manner and this is likely to benefit the risky assets. On cue, we are seeing the stock markets in the US going up in anticipation of the bill going through. The indications are that the bill would go through during the first half of the week and this is likely to be the most important event of note during the course of the week.

US Indices Likely to Move Higher

If and when the bill does go through, we would probably see the stock indices in the US continue to go higher and begin to set records as the bill involves some major tax cuts for the corporates and the upper class. This is likely to fuel a bull run in the indices but the impact of that is likely to be restricted to the US as the markets around the world are in a mode of consolidation and ranging as we head to the end of the year. The volatility and liquidity has been traditionally very low during this period of the year and the same is likely to be the case this time around as well.