CAC Steady, Investors Await US Tax Reform Votes

The CAC index has posted small losses in the Tuesday session. Currently, the index is at 5413.50, down 0.13% on the day. There are no French or eurozone events on the schedule. On Wednesday, the eurozone releases Current Balance, with the surplus expected to drop to EUR 33.4 billion.

It could be a banner week for global stock markets, as investors anxiously await the outcome of President Trump’s tax reform initiative. After frantic efforts by Republican lawmakers in recent weeks, the tax reform bill appears to have enough votes to become law. The House and Senate reconciled their versions of the tax bill on Friday, and the uniform legislation is expected to be voted on in the House on Tuesday and the Senate on Wednesday. With Democrats in both branches opposing the bill, the Republicans will need every vote in the Senate, where they have a razor thin 59-41 majority. Several Republican senators who were undecided have said they will vote in favor, so the bill is likely to pass through Congress and will then be signed into law by President Trump. This marks the first major overhaul of the US tax code in 30 years, and would represent a huge victory for Trump, ahead of Congressional elections in 2018.

There are few French indicators ahead of the Christmas holiday, but investors should keep a close eye on French consumer spending, which will be released on Friday. Consumer spending was dismal in October, with a sharp decline of 1.9%, compared to the forecast of 0.0%. However, the markets are expecting a strong rebound for November, with an estimate of a 1.4% gain. Christmas shopping will likely translate into strong consumer spending numbers for December, which could boost fourth quarter economic growth and send the CAC to higher levels.

Economic Calendar

Tuesday (December 19)

• There are no eurozone or French indicators

Wednesday (December 20)

• 4:00 Eurozone Current Account. Estimate 33.4B

*All release times are GMT

*Key events are in bold

CAC, Tuesday, December 19 at 7:25 EDT

Open: 5410.50 High: 5422.65 Low: 5408.50 Close: 5413.50

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