The markets started the week in good form when ousted candidates François Fillon and Benoît Hamon said they’d back Emmanuel Macron after his victory in the first round of the French presidential election.
The French CAC 40 had its best day since 2012, while the German DAX and the FTSE 100 had their best days so far this year. The FTSE jumped 150.13 points on Monday, with commentators hopeful that centrist Macron will retain his lead over his right-wing rival, Marine Le Pen, in the second-round vote on May 7.
Investor relief over the French election, combined with some good corporate results and President Trump’s promise of a corporate tax cut, led to a rally in the US, with the Nasdaq finishing above 6,000 on Tuesday.
The so-called “Trump bump”, in which the markets have been buoyed by the assurance that the new regime would cut taxes, wilted on Wednesday after the long-awaited reforms were met with disappointment. Critics said that plans to cut corporate tax from 35 per cent to 15 per cent, and reform personal taxes had little hope of passing congress.
Add to this Trump’s threat to withdraw from the North American Free Trade Agreement — which spooked the Mexican peso, the Canadian dollar, and a number of shares, and Trump’s bump could turn into a slump.
The tech companies held strong, though, with Amazon and Google reporting better-than-expected results, pushing their shares to all time highs on Thursday night.
There was good news this side of the Atlantic too, with Royal Bank of Scotland shares rising after it reported a £259 million profit in the first three months of the year.
However, disappointing GDP figures in the UK and US meant that the markets ended the week flat. The FTSE 100 closed at 7,203.94. Carol Lewis