Tax Reform, the Fed and the Tech Sector -- What You Need to Know

Investors pull back from all-time highs ahead of details on a major tax overhaul from Republican lawmakers

Author:: Edward Hardy
Publish date:: Nov 2, 2017 5:24 AM EDT

This is what you need to know on Thursday:

European stocks open weaker Thursday, with U.S. equity futures firmly in the red, as investors pull back from all-time highs ahead of details on a major tax overhaul from Republican lawmakers and the expected appointment of a new chairman at the Federal Reserve.

Traders on Wall Street will be focused on the unveiling of a Republican plan to cut taxes by as much as $6 trillion over the next decade, according to media reports, but could be disappointed by a lack of detail on offsets to pay for them, a shortcoming that could make passage of the bill -- which President Donald Trump has labelled "Cut, Cut, Cut" -- through Congress more difficult.

Weaker-than-expected earnings from the tech sector last night, particularly from clean-energy automaker Tesla Motors (T) - Get Report , are also expected to weigh on sentiment, although Thursday's anticipated declines are set against record highs for domestic stocks.

Reports that President Trump will likely name Fed Governor Jerome Powell to replace Yellen when her term expires early next year was also broadly supportive for global equities, given that he is seen as modestly more dovish than some of his rivals for the post, including Stanford economist John Taylor and former Governor Kevin Warsh.

Financial bookmakers IG are calling all of the European benchmarks lower at the start of trading, with Germany's DAX performance index, fresh from an all-time high yesterday, expected to slip 31 points, or 0.24%. Britain's FTSE 100 is expected to fall 0.4% at the bell, with trading activity focused on the Bank of England's mid-day policy decision that will likely lift interest rates for the first time in ten years.

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