GLOBAL MARKETS-Global stocks dip on U.S. tax doubts

From Reuters - November 10, 2017

LONDON (Reuters) - World stocks edged lower on Friday on signs that U.S. tax reforms could be delayed after Senate Republicans offered a plan that differed significantly from the House of Representatives version.

MSCIs global stock index .MIWD00000PUS, which tracks shares in 47 countries, declined 0.1 percent, slipping further from a record level.

On Thursday the global index failed by one day to post its longest winning streak since 2003 as it fell 0.4 percent following 10 days straight of gains.

The pan-European STOXX 600index was on track for its worst week in three months, however, down 0.2 percent on Friday and falling for a fourth day in row.

The MSCI world index has gained more than 18 percent so far this year and some investors believe a pullback is due.

I think theres a feeling out there that theres a long awaited correction, and no one wants to be caught by surprise, Emmanuel Cau, global equity strategist at JP Morgan, said.

When the market is down a bit people tend to extrapolate. But I think its simply a bit of profit taking and digesting from a very strong September and October.

On Wall Street, futures for the S&P 500 ESc1 fell 0.4 percent, while Dow futures 1YMc1 were down 0.2 percent, with the indexes set to extend Thursdays losses.

The hiatus over tax reforms weighed on the dollar .DXY. It gave up earlier gains to trade flat in percentage terms at 94.462 and was set for its biggest weekly drop in four weeks.

U.S. Republican senators said they wanted to slash the corporate tax rate in 2019, later than the Houses proposed schedule of 2018, complicating a push for the biggest overhaul of U.S. tax law since the 1980s.

The House was set to vote on its measure next week. But the Senates timetable was less clear.

Things look fluid, including on when the tax cut deal will be reached, said Hirokazu Kabeya, chief global strategist at Daiwa Securities.

I would say a compromise will be reached ...But if they indeed decide to delay the tax cut by a year, there is likely to be some disappointment.


Strength in the global economy is expected to continue offering broad support to stocks.


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