Strong earnings reports from retailers like Lowe’s and Target are pushing markets higher in the U.S., reversing the 170-plus point loss on Tuesday for the Dow. Better-than-expected earnings from major retailer Home Depot is also helping to calm investors who appear to be concerned about the possibility of a U.S.-economy recession this year.
The market is also expecting to digest the FOMC meeting minutes based on the end of July meeting to assess how the Fed voted and reasoning behind dissenting views.
President Trump also came out on Tuesday to state he was considering payroll tax cuts, canceling the White House’s earlier statement that such a tax cut was not being considered. Mr. Trump’s statement is a headline that is moving markets higher in early Wednesday trading.
European markets also strengthened despite the political situation in Italy which now throws into question whether a fresh election will be called after Prime Minister Giuseppe Conte’s resignation on Tuesday. The FTSE, DAX, and CAC40 were all higher by a percent near the close. British stocks were also lifted despite little expectations of a breakthrough in Brexit discussions.
The French government now considers a no-deal Brexit to be the likeliest scenario and this could result in the immediate implementation of border controls between EU and the UK, based on a statement by an official at the French president’s office. Also, the EU is expecting the UK to pay the $47bn exit bill under a no-deal scenario.