1. Moving the Markets

Things started out to the downside with the S&P 500 sliding almost 1% after Wall Street had some time to digest President-elect Trump’s press conference. Disappointment spread as he chose not to discuss details of his proposed economic policies that were the main driver behind the post-election rally. However, the indexes were magically lifted later on in the session saving equities from their worst day in 3 months.

This brings into question as to whether Trump can actually push his agenda through in a timely manner. If not, there is a high probability that market volatility will increase and with it the possibility of equities giving back some of their gains. After all, markets are in bubble territory when viewed based on economic fundamentals; however, they can stay in the mode until, one day, wishful thinking along with hope give way to reality. Historically, it always does, however, the timing of it is the big unknown.

In economic news, Fiat/Chrysler’s stock price crashed over 14% and trading was halted. The old cockroach theory was verified: If you see one, there are others in hiding. Turns out that Fiat has been accused of engaging in a similar scheme as Volkswagen by using cheating software to beat diesel emissions tests. Makes me wonder who is on deck next.

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1. Moving the Markets

It was a wild ride for the major indexes as they vacillated above and below the unchanged line depending on the words of the moment during President-elect Trump’s first formal news conference since the election.

Case in point was the punishing effect on Biotech/Pharma stocks when Trump opined that that industry “was getting away with murder,” and that “we need new bidding procedures.” That’s all it took and Biotech/Pharma plunged the most since Brexit in June of 2016.

In the end, the S&P healthcare index ended the session down -1% after falling as much as 1.9% earlier on. The Biotech index was not as fortunate and sank -2.96%. That ended a 6-day winning streak for both indexes. Worries about the sector eased later in the session as Trump remained vague about any details on healthcare proposals.

Wall Street is in caution mode due to 2 big upcoming events namely the start of earnings season this Friday and Trumps inauguration a week later on January 20^th. We now need to see some evidence that earnings are better than expected and can justify the market’s sugar high and that Trump will be able to deliver on his promises. Any disappointment and it may take a while longer for us to get to Dow 20k.

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1. Moving the Markets

At least for today, New Year momentum slowed as the major indexes predominantly hovered below the unchanged line and closed at their lows for the session. The exception was the Nasdaq, which managed to eke out a gain of +0.19%.

It was a tale of opposing market forces as technology strength was offset by weakness in financials and the energy sector. Oil took a beating and lost -3.85%. Bonds pulled back as Treasury yields rose slightly. The dollar came off its lofty level and, as a result, gold was the winner by adding +0.80%.

It seems right now we are in a holding pattern with earnings on deck as Wall Street is dealing with the political uncertainty as to whether Trump will be able to deliver on tax cuts, lighter regulation and fiscal stimulus.

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