Up, Down, Sideways, or Across?

with No Comments

Stock Markets and Pro-Growth

Markets weren’t quite sure which direction to move last week.

The Trump rally, which lost some steam, gained momentum early in the week. The Standard & Poor’s 500 Index finished January 19, the day before the inauguration, with its biggest election-to-inauguration gain since Bill Clinton won a second term in 1996, according to MarketWatch, and the Dow Jones Industrial Average remained within striking distance of 20,000, according to Yahoo!Finance.

On Friday, President Trump delivered his inauguration address, but it didn’t resolve the uncertainty that has been nagging investors. The speech mentioned infrastructure activity, brushed over stimulus spending and tax cuts, and leaned heavily into protectionism. Mr. Trump said:

“America will start winning again, winning like never before. We will bring back our jobs. We will bring back our borders. We will bring back our wealth. And we will bring back our dreams. We will build new roads, and highways, and bridges, and airports, and tunnels, and railways all across our wonderful nation. We will get our people off of welfare and back to work – rebuilding our country with American hands and American labor. We will follow two simple rules; buy American and hire American.”

The market response to Friday’s speech was subdued, according to Financial Times:

“…with U.S. stocks edging higher, Treasuries putting in mixed performances and the dollar easing back against its main rivals. Oil prices rose sharply amid hopes that producers would show compliance to a global deal to cut output. Gold initially struggled for traction but held above the $1,200 an ounce mark.”

All major U.S. stock markets finished the week slightly lower, and 10-year Treasury yields finished the week slightly higher.

Sources:

  • http://www.marketwatch.com/story/how-the-trump-rally-stacks-up-to-other-postelection-stock-market-gains-2017-01-18
  • https://finance.yahoo.com/quote/^DJI?p=^DJI
  • https://www.washingtonpost.com/news/the-fix/wp/2017/01/20/donald-trumps-full-inauguration-speech-transcript-annotated/?utm_term=.5e618d7a29fd
  • https://www.ft.com/content/fe66322a-deb8-11e6-86ac-f253db7791c6 (or go to https://s3-us-west-2.amazonaws.com/peakcontent/+Peak+Commentary/01-23-17_FinancialTimes-Markets_Give_Muted_Response_to_Trump_Speech-Footnote_4.pdf)
  • http://blogs.barrons.com/stockstowatchtoday/2017/01/20/condemned-to-hope-dow-dips-0-3-this-week-as-market-waits-for-trump-revival/?mod=BOL_hp_blog_stw
  • https://finance.yahoo.com/quote/%5ETNX/history?p=%5ETNX
  • http://www.forbes.com/sites/johnarcher/2017/01/04/lg-unveils-stunning-new-oled-tv-range-including-jaw-dropping-wallpaper-design/#538766222c05

 

Disclaimer

*These views should not be construed as investment advice. * The Standard & Poor’s 500 (S&P 500) is an unmanaged group of securities considered to be representative of the stock market in general. You cannot invest directly in this index. * The Standard & Poor’s 500 (S&P 500) is an unmanaged index. Unmanaged index returns do not reflect fees, expenses, or sales charges. Index performance is not indicative of the performance of any investment. * The Dow Jones Global ex-U.S. Index covers approximately 95% of the market capitalization of the 45 developed and emerging countries included in the Index. * The 10-year Treasury Note represents debt owed by the United States Treasury to the public. Since the U.S. Government is seen as a risk-free borrower, investors use the 10-year Treasury Note as a benchmark for the long-term bond market. * Gold represents the afternoon gold price as reported by the London Bullion Market Association. The gold price is set twice daily by the London Gold Fixing Company at 10:30 and 15:00 and is expressed in U.S. dollars per fine troy ounce. * The Bloomberg Commodity Index is designed to be a highly liquid and diversified benchmark for the commodity futures market. The Index is composed of futures contracts on 19 physical commodities and was launched on July 14, 1998. * The DJ Equity All REIT Total Return Index measures the total return performance of the equity subcategory of the Real Estate Investment Trust (REIT) industry as calculated by Dow Jones. * Yahoo! Finance is the source for any reference to the performance of an index between two specific periods. * This newsletter was prepared in whole or in part by Peak Advisor Alliance. Peak Advisor Alliance is not affiliated with Skygate Financial Group. * Opinions expressed are subject to change without notice and are not intended as investment advice or to predict future performance. * Economic forecasts set forth may not develop as predicted and there can be no guarantee that strategies promoted will be successful. * Past performance does not guarantee future results. Investing involves risk, including loss of principal. * You cannot invest directly in an index. * Consult your financial professional before making any investment decision. * Stock investing involves risk including loss of principal.