Wall Street: Trump initiatives against the clock; Goodbye 'fairly soon' March hike
|Market participants seem to lose faith in Trump's promises and the 'phenomenal agenda' that made him 45th President of the United States. Over the last 4 weeks, the wires have been flooded with attractive headlines that have no correlation with the new US administration actions. Furthermore, as the Dow Jones navigates strange waters with overpriced securities trading at risky EPS multiples the inevitable seems to be around the corner and a +10% correction should not be ruled out.
US indexes ended on a mixed note as the Dow Jones Industrial Average clocked 20,817.03, up +0.03% or +6.71 points, then the always active SP500 failed to join the green party down -0.01% or -0.15 points ending at 2,363.66 and finally, the tech heavyweight Nasdaq punched a decent +0.17% or +9.80 points to settle the score at 5,845.31 on the last trading hour.
On the FX front, the dollar collected 'worse than expected' results in the foreign exchange battlefield as the American dollar vs. Japanese Yen crashed (175)-pips after the FOMC minutes 'fairly soon' rhetoric failed to boost the greenback to new highs and close the chapter where traders dreamed with a 'sooner rather than later' rate hike in March. The most significant debacle came in the hands of the Mexican Peso as the USD/MXN exotic collapsed (2.72%) or (5434)-pips.
Trump speech to Congress next Tuesday should move markets
Turning to market volatility and leading indicators via yields, the iPath SP500 VIX Short-term Futures or VXX, clocked -0.11% or -0.02 at 18.26 compared to 23.70 at the beginning of January which indicates the level of 'comfort' market participants seem to enjoy lately. On the other hand, US yields experienced a challenging trading activity that traders visualized on the US dollar Index and US pairs, when the US 10yr treasury yields traded from 2.38% to 2.30%, down -2.54% on the day or -0.0603 which translate into a new 4-week low.
On the commodity front, Gold spot ended the week on a positive note at $1258 as the shiny metal clocked a new high near $1260 not too far from challenging the 200-DMA. Then, Silver spot ended on green pastures near $18.30 which translates to prices closing above the 200-DMA from this level the 'poor man's gold' could target to the upside $18.80 (high Nov. 11) and above that $19.25 (high Oct.3). Later, WTI roared at $54 and kept trading above the 50-DMA which is now a critical support near $52.90.
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