Daily Market Color December 4, 2017Senate Passes Tax Bill, Republicans Move Closer to Finalizing Cuts Senate Passes Tax Reform Bill Senate Republicans celebrated early Saturday morning as their tax bill, the Tax Cuts and Jobs Act, was formally passed by a 51-49 vote. Senator Bob Corker was the lone Republican to vote against the measure which featured a reduction in the corporate tax rate to 20%, repeal of the Obamacare mandate and inclusion of the Alternative Minimum Tax. The Senate’s version of the bill also featured an expiration of the tax cuts in 2026 to comply with the budget rules that disallow increasing the federal deficit beyond a 10-year budget window. Over the next 10 days, Congress will attempt to consolidate the House and Senate tax bills, a process which has drawn skepticism following President Trump’s comments on Saturday that the corporate tax rate may end up near 22% rather than 20% when all is said and done. US stocks were mixed in the first trading session following the Senate’s tax bill news, with bank stocks and small cap shares leading the way as investors shifted out of tech stocks which have generally outperformed YTD. The DJIA finished 0.3% higher on the day while the S&P 500 edged 0.05% lower and the tech-heavy Nasdaq declined a full percent. A morning selloff in US Treasurys eased throughout the day, albeit yields/swap rates are currently up 1-4 bps across the curve in a bear-flattening pattern. The 10-year note yield is poised to finish the day near 2.37% after trading as high as 2.42% earlier. The US dollar rose 0.3% against major currencies, highlighted by 0.4% gains against the euro and yen. Brexit Phase 1: Not Complete Earlier today, UK Prime Minister Theresa May met with European Commission President Jean-Claude Juncker in what was supposed to be a productive lunch to finalize the details of the initial phase of Brexit negotiations. That said, the Irish border proved to be a more difficult topic to settle than initially envisioned. Midway through the meeting May received a call from the leader of the Democratic Unionist Party of Northern Ireland, which ultimately led to the adjourning of the lunch without a deal to be struck. Whether Northern Ireland, as a part of the UK, will be forced through Brexit to have a hard border with the Republic of Ireland continues to be one of the largest hurdles in reaching an accord, but both May and Juncker expressed optimism that progress would be made in the near future.