U.S. stocks slammed into the S&P for the 6th consecutive year

Sina US stocks news Beijing time on the 6th morning, US stocks closed higher on Thursday, technology and financial stocks led the gains. The three major stock indexes hit a new high in intraday and closing history, with the S&P 500 index closing at a new high for six consecutive trading days, the best performance in 20 years. The market expects the tax reform plan to provide new stimulus for risky assets such as the stock market.

At 16:00 on October 5th (04:00 on October 6th, Beijing time), the Dow rose 113.75 points, or 0.50%, to 22,775.39 points; the S&P 500 index rose 14.33 points, or 0.57%. Reported at 2,552.07 points; the Nasdaq rose 50.73 points, or 0.78%, to 6,585.36 points.

US stocks three major stock indexes hit a new high in intraday and closing

The S&P 500 index rose for eight consecutive trading days, the longest consecutive rise since 2013. In addition, the index has also set a record high for the sixth consecutive trading day, the longest record since the record high of 8 consecutive days in 1997.

In the intraday trading session, the Dow climbed to 22,777.04 points, the S&P 500 index rose to 2552.51 points, and the Nasdaq climbed to 6587.21 points, both of which set the highest intraday record set yesterday.

What are the market drivers?

The US Department of Labor reported on Thursday that as of September 30, the number of US initial jobless claims was 260,000, with an expected 265,000 and a previous value of 272,000.

Another data shows that the US trade deficit in August fell to $42.4 billion from $43.6 billion in July. Economists who previously accepted the MarketWatch survey expected the figure to be $42.6 billion.

The US House of Representatives takes the first step in the 2018 fiscal year budget resolution tax reform

The market is also expecting the Trump administration's tax reform program to provide new stimulus to risky assets such as the stock market.

Republicans in the US House of Representatives and the Senate pushed forward the US budget for the 2018 fiscal year on Thursday, taking a tangible first step towards achieving the US tax cuts. But the future will be a more difficult task.

"There is no doubt that this is a tough battle," Orrin Hatch, a Utah Senate and chairman of the Senate Finance Committee, told reporters. The committee is responsible for the development of tax laws.

US President Donald Trump issued a statement praising the plan, saying that it "promotes economic growth and job creation" and laid the foundation for "reforming our manipulated and heavy tax laws."

Fed officials speak

Federal Reserve officials who spoke today include Federal Reserve Governor Jerome Powell, San Francisco Fed President John Williams, Philadelphia Fed President Patrick Harker, and Kansas Federal Reserve Governor Esther George and so on.

Jerome-Powell is one of the hottest candidates for the next Fed chairman.

Williams blamed the low inflation rate on the volatility of categories that are less correlated with the strength of the economic cycle. The US inflation rate has long been lower than the Fed's 2% target.

Speaking at the Community Banking Conference in St. Louis on Thursday, Williams said: “The dramatic price volatility of these industries has proved to have a temporary impact on inflation. This time I also expect that their impact will not last with these effects. The weakening, strong economy is driving economically sensitive price increases, and I am optimistic that inflation will rise to the 2% target in the next two years."

Williams said he expects unemployment to fall next year and eventually fall to just under 4%. “In a new era of moderate economic growth, banks need to plan for lower interest rates,” Williams said. The current neutral interest rate is about 0.5%, meaning that in the case of an inflation rate of 2%, 2.5 % will be the equilibrium interest rate.

Federal Reserve Governor Powell said that tightening regulation is not always the best way to solve problems, and market action should be considered when taking action.

In a speech, Philadelphia Fed President Hucker predicted that the Fed will still raise interest rates in December.

Investors are also paying attention to the minutes of the ECB's last meeting, hoping to see the clues of the bank's plans for the next few months.

Who will become the next Fed chairman?

Janet Yellen's Fed chairmanship will end in February. Although Trump did not rule out the possibility of re-appointing her, other candidates were more likely to be selected. The market currently believes that Federal Reserve Governor Jerome Powell and former Federal Reserve Governor Kevin Warsh have a greater chance of serving as the next Fed chairman. Gary Cohn, a senior economic adviser to the White House, is also considered one of the candidates, but his relationship with Trump is said to have become cold.

Trump said on September 29 that he had held four meetings on the vacancy of the next Fed chairman, when he said he would make a decision in the next two or three weeks.

Bank of America Merrill Lynch economists Michelle Meyer and Alexander Lin said in a research report to clients today that before the Fed chairman's election was finalized, "we expect market participants not to be too tough on the medium-term monetary policy."

These economists made the expectation that they think the four candidates will implement the Fed policy separately.

They believe that Walsh, who served as a Fed governor from 2006 to 2011, is the most radical and most likely to change the way the Fed implements monetary policy.

Bank of America Merrill Lynch analysts said in the report: "We think he will agree to lower the final size of the balance sheet and become a strong supporter of deregulation."

In September this year, the Fed decided to reduce its total balance sheet of $4.5 trillion from October, but the reduction process will be very gradual.

In many of his commentary articles and speeches, Walsh's radical monetary policy stance is well documented.

Bank of America Merrill Lynch analysts said: "We believe that Walsh will tentatively set a higher long-term balanced federal funds rate and emphasize the strong desire to restore the balance sheet size to the 'pre-crisis' level. Fed next year The possibility of raising interest rates four times has increased."

The current federal funds futures market is expected to raise interest rates once before the end of this year, but it is expected that the probability of raising interest rates twice before September next year is only 20%.

How do analysts say?

Mihir Kapadia, CEO and founder of Sun Global Investments, said: "The market may respond positively to positive economic data, the prospects of large-scale tax cuts, and the quelling of North Korea's geopolitical risks. If economic data continues to be strong, Trang The general government can implement a tax cut policy, and US stocks may continue to climb in the coming months."

IG Chief Market Analyst Chris Beauchamp said: "As the US dollar exchange rate climbed to a new high in the past two months, it seems that the market is ready to believe that the Fed will continue to work to raise interest rates, even if they think the current forecast is a bit too radical." The Institute of Supply Management (ISM) manufacturing and services data, which was released this week, has soared, making it possible for the Federal Reserve’s Powell and Huck to comment. Both economic data provide the basis for the Fed to continue to raise interest rates. He said that the Fed officials’ speech may also announce details of the reduction of the balance sheet.

What is the performance of other asset markets?

Asian markets generally closed higher on Thursday. Some stock markets are closed for holidays.

In European stock markets, the Pan-European 300 Index closed up 0.17% to 1536.07 points; the UK FTSE 100 index closed up 0.5%; France's CAC 40 index closed up 0.3%; Germany's DAX 30 index closed down 0.1%.

Spain's stock market rebounded strongly, Spain's IBEX index closed up 2.9%. The Spanish IBEX index suffered the biggest one-day drop in 15 months on Wednesday. The Spanish stock market has been hit hard in recent days as the situation in Catalonia has become violent after the referendum has chosen independence.

Gold futures for December delivery on the New York Mercantile Exchange fell $3.60, or 0.3%, to close at $1,273.20 an ounce.

The Gulf of Mexico will be hit by the hurricane again, and the possibility of an extension of the OPEC production reduction agreement after the Russian-Saudi talks will increase, which will support oil prices. New York's WTI futures rose 1.6% in November to close at $50.79 per barrel. November oil rose 2.15% to close at 57 US dollars / barrel. (Zhang Jun)

(Editor: He Yihua HN110)