Market update: Obama shows he is serious about deficit reduction

Source: Henderson Global Investors

Wall Street continued to rally on Wednesday. The S&P 500 and Dow Jones reached new highs yesterday (S&P 500 +1.2%, Dow Jones +0.9%), with tech shares among the largest gainers. Yesterday, President Obama showed he was serious in his efforts to reduce the federal deficit by proposing a budget of $3.77 trillion, incorporating social security cuts and more tax rises for wealthy Americans. The proposed measures have not deviated from those put forward last year, which were rejected by the Republicans.

European markets this morning have warmed up after opening relatively flat (FTSE Eurofirst 300 +0.5%, FTSE 100 +0.3% at the time of writing). European resource stocks are at the bottom of the FTSE 100 after a shock loss from Russian steelmaker Evraz. The company reported a loss of $355m, defying predictions for a circa $43m profit. The company fell 15% at the start of trading. Retail giant Marks and Spencer’s latest trading report came in not as weak as feared with a 3.8% drop in like-for-like sales in its fourth quarter. Chief executive Marc Bolland has played down talks of takeover by a Qatari wealth fund.