U.S. stocks were poised to finish the week on a strong note, with major stock indices hovering near record highs, receiving another boost on Friday after the Senate passed a budget blueprint for the next fiscal year.
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The budget, passed late Thursday evening, paves the way for tax reform, which is seen as essential for this bull market to stay alive.
One of the best performing sectors on Friday was the financial sector, with the major U.S. banks getting another boost even with shares at high valuations, following their recent quarterly earnings reports.
The banks have been hopeful about tax reform, with the CEO of JPMorgan Chase (NYSE:JPM) Jamie Dimon telling reporters during a post earnings conference call that the bank will be boosting jobs and wages “more than we otherwise would have” if corporate taxes are cut. During their earnings discussion, Goldman Sachs (NYSE:GS) executives said their clients felt that tax reform would be a “good thing.”
President Donald Trump has proposed a 15 percentage point change to the corporate tax rate, which would reduce it from 35% to 20%.
JPMorgan, Citigroup (NYSE:C), Goldman Sachs, and Bank of America (NYSE:BAC) beat quarterly expectations on top and bottom lines, whereas Wells Fargo (NYSE:WFC) topped earnings per share estimates but missed on revenue. Wells Fargo has been hit with legal expenses due to its ongoing fraudulent account scandal.
The major U.S. stock indices set records again this week. The Dow Jones Industrial Average, which set a new record on Friday, has now posted its third-longest bull run in calendar days and has appreciated by over 250% from its bear market low of 6547.07, which it hit on March 9, 2009.
The S&P 500 has experienced its second longest bull market, climbing over 278% from its bear market low of 676.53 hit on March 9, 2009. The Nasdaq has experienced its longest calendar day bull run in history. It was up 422.15% as of Oct. 18.