S&P 500 Rallies Ahead Of Q3 Earnings, GBP Supported By Revisions To UK Finances
Aa
Share
Summary:
- The Treasury would conduct a review of the best strategies.
- S&P 500 up 2.65%.
S&P 500 rallies ahead of Q3 earnings
U.S. equities rose on Monday as investors gathered for a large week of corporate profits, helped by a batch of positive bank results and a reversal of tax reduction plans in the U.K.
The sixth-largest bank in the nation by assets, Bank of America (BAC), was the last to announce profits on Monday. After the company announced trading revenue that exceeded Wall Street expectations, shares increased by more than 6%. Positive sentiment was also boosted by Bank of New York Mellon's (BK) and brokerage Charles Schwab's (SCHW) stronger-than-expected results. U.S. equities rose on Monday as investors gathered for a large week of corporate profits, helped by a batch of positive bank results and a reversal of tax reduction plans in the U.K.
The swings on Monday follow a wild week on Wall Street, during which the S&P 500 had its fifth-largest intraday reversal from a record low on Thursday, despite consumer price data showing that inflation persisted in its inexorable march throughout the U.S. economy last month. Even yet, the benchmark index declined for the week.
GSPC Price Chart
Energy cap due to end in April
After the UK government scrapped all of its tax-cutting proposals and announced that its program to help people pay their energy bills will now stop in April, the British pound continued to rise on Monday. The actions are a cornerstone of the incoming Chancellor Jeremy Hunt's strategy to win back market trust in the UK's finances. According to Hunt, the Treasury would receive an additional £32BN year from the rollback of tax cuts.
Hunt added that the Treasury would conduct a review of the best strategies for shielding consumers and companies from rising gas and electricity prices. The major expenditure made by the new government, the Energy Price Guarantee, which now caps energy prices, will now expire in April.
When the program was first announced, it was open-ended in nature, which made it challenging for markets to value the prospects for the UK's finances.
Markets will be more certain about how the country's liabilities will change as a result of the programme's limitations. The government's message to the markets is unmistakable: it is totally committed to regaining credibility.
Sources: finance.yahoo.com, poundsterlinglive.com
