September 18, 2017 – Weekly Market Commentary


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Fred Imbert – CNBC
S&P 500, Nasdaq, and Dow Close at Records After Interest Rates Jump, Mnuchin Talks up Tax ReformSummary: US major indexes rose to all-time highs driven by the financial sector and comments from Treasury Secretary Steven Mnuchin on tax reform. Investors swiftly rotated to risk-on trades as North Korean fears were alleviated and damage from Hurricane Irma appeared to be less than expected. Mnuchin said that he was “hopeful” that tax reform would be accomplished by year’s end and that reforms could be backdated to January 1, 2017. 

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BBC News
Brexit: EU Repeal Bill Wins First Commons VoteSummary: The bill which will end the supremacy of EU law in the UK passes its first parliamentary test. More than 150 proposed amendments will now be reviewed. Should the bill pass, it will convert all existing EU laws into UK laws to ensure a smooth Brexit. 

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Jacob Pramuk – CNBC
Mnuchin Says Considering Backdating Tax Cut to Jan. 1Summary: Treasury Secretary Steven Mnuchin said that the White House is considering backdating tax reform to the start of this year to boost the economy. He insisted that tax overhaul would happen this year. Republicans have been vying for decreases to personal income taxes, corporate taxes, and pass-through company rates as well as a one-time repatriation tax to bring multi-national cash back to the US. 

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Richard Partington – The Guardian
UK Interest Rates Stay at 0.25% but Bank of England Hints Rise is LoomingSummary: The Bank of England left its key rate at 0.25% amid the expectation that the Brexit will still deal a blow to the economy. A rising pound and strengthening economy led the bank to comment that some withdrawal of stimulus would be appropriate in coming months. Expectations for a December rate hike jumped to over 54% on the comments. 

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Reuters Staff
U.S. Consumer Prices Accelerate in AugustSummary: Consumer prices rose last month due in part to higher gasoline and rent costs. Year-over-year, consumer inflation rose to 1.9%. Core CPI, which excludes volatile food and energy components, rose to 1.7% year-over-year. Low inflation has been crucial to the Fed’s argument for leaving rates unchanged, and more consistent readings could influence their decisions at upcoming meetings. 

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Jeffrey Kleintop – Charles Schwab
How the Shift by Central Banks May Affect the Stock MarketSummary: Central banks have been credited with inflating financial markets through quantitative easing. Kleintop says that the shift from easing to tightening has some investors on edge, but that does not mean the markets will reverse. The markets have followed earnings expectations much more closely than central bank balance sheets in recent years. Balance sheet trimming and removal of QE should not reverse this trend. 





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