Weekly reviews

US markets quiet ahead of Trump’s inauguration

Wall Street futures were set for a quiet opening ahead of this week’s key event: Donald Trump’s inauguration ceremony. The republican will become later in the day the 45th president of the United States and market participants won’t miss it.

Yesterday, US stock indexes ended to the downside on Thursday, with financials and real estate sector leading among decliners. The Dow Jones industrial average closed nearly 70 points down, dragged by Goldman Sachs stocks. The S&P 500 and Nasdaq also traded in red.

  • Dow Jones Industrial Average: -0.37 percent / 19732.40 points

  • Standard & Poor’s 500: -0.36 percent / 2263.69 points

  • Nasdaq Composite: -0.28 percent / 5540.08 points

Since November elections, American stocks have rallied to record levels over speculation that Trump's administration would promote higher fiscal spending, tax cuts and deregulation on several sectors, including the financial and pharmaceutical sectors.

On the data front, building permits dropped 0.2 percent in December while housing starts grew 11.3 percent, well above expectations of a 8.6 percent build. Initial jobless claims felt by 20,000 last week, leaving the total at 234,000. The Philadelphia Federal Reserve Manufacturing index for January also came in above forecast at 23.6 points.

As for the bond market, we saw a positive reaction to Fed Chairwoman Janet Yellen speech on Wednesday, saying the economy was close to reaching its goals. We observed US 10-year Treasury yields breaking above 2.487 percent while the 2-year bond moved to 1.238 percent.

Fourth-quarter corporate earnings were also scrutinized by traders, although markets were pressured by profit taking in the wake of Trump’s inauguration.

On Friday, investors will pay close attention to Donald Trump’s speech at 17:00 GMT in search for hints regarding his economic plan. If you are a commodity trader, then you would probably also keep an eye on Baker Hughes weekly oil rig count for the United States.

Fort Financial Services