Strong US economic data have driven Wall Street on Wednesday. The world’s largest economy grew surprisingly strongly by three percent in the second quarter. In addition, the US private sector created considerably more jobs than expected in August. Further information on the state of the economy is to be found in the Government Labor Market Report, which is expected on Friday. In addition, the investors’ concerns about the North Korean conflict were diminishing. In particular, technology stocks picked up again.
“We suspect the North Korea problem, although not yet causing a rush to exit will eventually take a negative toll on the markets,” said Peter Cardillo, chief market economist at First Standard Financial.
On Wednesday, investors were also closely followed by a Trump’s tax reform plans. However, Trump only reaffirmed its goal of reducing corporate taxes to 15 percent. He did not propose a new plan. American families should also benefit from tax reforms. Trump wants, among other things, to recall that American companies spend money in other countries to return to the US. Also, the purchasing power of Americans needs to be improved. The plans must still take shape this year.
The US economy turned out to be stronger in the second quarter than economists had expected. In addition, according to payroll processor ADP, more jobs were added in August than was expected on average. On Friday, figures from the US government, including government jobs, are included.
“What the market may be reflecting is the possibility that the [Federal Reserve] could still be on the table for this year,” said Michael Arone, chief investment strategist at State Street Global Advisors.
Also, the tropical storm Harvey continues to occupy the moods in the United States. Natural disaster causes pressure on oil prices. Large power companies like ExxonMobil and Chevron fell 0.5 percent. Harvey mainly hits Texas, which is the heart of the American oil industry. By the storm, big players in the oil sector were forced to temporarily shut down refineries.
Rockwell Collins lost 0.2 percent of stock market value, after the strong profit a day earlier. Rumors are still circulating that the company is merging with industry-maker United Technologies, which offers more than $20 billion for Rockwell.
