Weekly reviews

Wall Street extends losses amid political concerns; Fed meeting eye

Wall Street indexes ended lower on Tuesday, extending previous losses as President Trump’s agenda continued to weigh on market sentiment, while keeping an eye on earnings and anticipating to fresh remarks from the Federal Reserve.

On Wednesday, the Federal Reserve will close its first two-day policy meeting of the year and give a press conference at 19:00 GMT. The US regulator is widely expected to keep interest rates steady between 0.50 and 0.75 percent.

According to Fed funds tracked by CME Group, odds for a rate increase in January stand a poor 4 percent, as market players consider it’s too early for changes. The central bank is currently evaluating Trump’s economic measures and policies in order to define a suitable path for monetary policy. Back in December, Fed Chair Janet Yellen said the bank could raise interest rates as much as three times in 2017.

Markets have been growing consistently over the last few month on the back of Trump’s promises for tax reforms, higher construction spending and solid economic growth. Those conditions are perfect for higher interest rates, but the Fed authorities agreed that any adjustment should be entirely justified by economic statistics.

  • Dow Jones Industrial Average: -0.54 percent / 19,864.09 points

  • Standard & Poor’s 500: -0.09 percent / 2,278.87 points

  • Nasdaq Composite: +0.02 percent / 5,614.79 points

In economic news, the Conference Board released on Tuesday its Consumer Confidence Index, which currently stands at 50.3 percent against an estimated 55.0 and a previous reading of 54.6.

Today, market participants will be focusing on ADP nonfarm employment change at 13:15 GMT, with analysts forecasting an increase of 165,000 jobs in January. Manufacturing PMI for January will be available at 14:15 GMT, while ISM Manufacturing Employment and PMI will be released a bit fifteen minutes later.

Commodity markets will pay close attention to the Energy Information Administration weekly report on US crude inventories at 15:30 GMT. Economists expect a build of 3.3 million barrels in the week ended January 27, which could lead into bigger concerns over increasing US output.

chart 02.2017

chart 02.2017

chart 02.2017