Markets mixed as Trump tax plan released amid high stock valuations

Markets were mixed on Wednesday.

The S&P 500 fell less than 0.1 percent but the STOXX Europe 600 rose 0.5 percent and the Nikkei 225 jumped 1.1 percent.

Stocks fell in the US despite Treasury Secretary Steven Mnuchin and National Economic Council Director Gary Cohn releasing a one-page outline of President Donald Trump’s tax-reform plan in a press conference on Wednesday.

“The market was looking for more specific color on rates and the reduction of exemptions, but color on the repatriation tax, which is the single most important issue, was left unaddressed by that press conference,” said Nicholas Colas, chief market strategist at Convergex.

Investors may also be getting more nervous as the US stock market becomes increasingly expensive. Ben Carlson noted on Wednesday that the S&P 500’s cyclically-adjusted price-to-earnings ratio reached 30 this week.

However, that has not stopped Morgan Stanley from raising its allocation to US equities this week.

“Tactically, the outcome of the first round of the French elections has been market-friendly and investor sentiment does not look extended. We add to U.S. equities. We fund this by taking cash to neutral,” wrote Andrew Sheets, a strategist at Morgan Stanley, in a report.