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Day ahead: Trump's first speech to Congress key as tax plan news sought

Rather than give the annual State of the Union address, Trump is instead going to give a speech to both parts of Congress - the Senate and the House of Representatives – which is quite normal for first-year presidents.

Donald Trump at his inauguration
David Morrison, senior market strategist at SpreadCo., said: “Many investors are hoping that President Trump will finally reveal his plans for tax reform and infrastructure spending"

Although the corporate news diary is fairly full on Tuesday, notably with results due from blue chips Taylor Wimpey PLC (LON:TW.) and Fresnillo PLC (LON:FRES),  the market will be more closely focused across the Atlantic and President Donald Trump’s first speech to Congress.

Rather than give the annual State of the Union address, Trump is instead going to give a speech to both parts of Congress -  the Senate and the House of Representatives – which is quite normal for first-year presidents.

David Morrison, senior market strategist at SpreadCo., said: “Many investors are hoping that President Trump will finally reveal his plans for tax reform and infrastructure spending.

“However, last week Trump’s Treasury Secretary Steven Mnuchin gave an interview in which he appeared to warn the markets not to expect too much too soon.

“While he said that tax reform was the cornerstone at the base of this administration’s pro-growth agenda, it could all take time to implement.”

Gold prices have been a beneficiary of the Trump focus recently,  with the yellow metal currently trading near three month highs around US$1,250 an ounce, lifted by a relatively weak US dollar in which it is priced.

Results from precious metals group Fresnillo should show its fourth-quarter group revenues got a boost as average selling prices for both silver and gold should have risen compared to the previous year.

Investors will also expect news on progress for the Mexico-focused firm’s newer mines, which must raise production as older ones are maturing and experiencing lower grades of ore.

Meanwhile, fellow FTSE 100-listed firm Taylor Wimpey will continue the housebuilding sector's recent flow of numbers, although, once again, having given a detailed trading update in January few surprises are expected.

In a preview note, analysts at Peel Hunt pointed out that Taylor Wimpy said last month that its full-year 2016 volumes were 4% ahead of the previous year at 13,881 homes,  while average selling prices were ahead 11% at £255,000.

They are forecasting  around a 20% increase in the housebuilder’s pre-tax profits to £728mln, with the forward order book at the start of January expected to stand at  £1.7bn.

The analysts said: “We will be looking for an update on the pace of any pick-up in land spend after the slowdown around the time of the referendum and whether the land market has tightened given the peer group has also increased land spend in recent months.“

Significant announcements expected on Tuesday:

Finals: Bodycote PLC (LON:BOY), Croda International PLC (LON:CRDA), Elementis PLC (LON:ELM), Fresnillo PLC (LON:FRES), GKN PLC (LON:GKN), Interserve PLC (LON:IRV), Johnson Service Group plc (LON:JSG), Laird PLC (LON:LRD), Moneysupermarket.com Group PLC (LON:MONY) Provident Financial PLC (LON:PFG), Sphere Medical Holdings PLC (LON:SPHR), St James’s Place PLC (LON:STJ), Tullow Oil plc (LON:TLW), Taylor Wimpey PLC (LON:TW.)

Interims: Go-Ahead Group PLC (LON:GOG), Revolution Bars Group PLC (LON:RBG), Redde Plc (LON:REDD), Ricardo plc (LON: RCDO), Swallowfield plc (LON:SWL), Waterman Group PLC (LON:WTM)

Trading statements: Babcock International PLC (LON:BAB), OPG Power Ventures PLC (LON:OPG)

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