The three major indices fell down today. The DOW lost 27 points, the S&P 500 dropped 6, and the NASDAQ shed 2 points. The fundamental reason for all the anxiety is that the market is beginning to hold the new administration to account on its campaign promises…and it is reacting negatively to all of the talk about protectionist policies. These policies could hurt the earnings of multi-national companies. This trend is exemplified by the new president’s vows to re-negotiate NAFTA and to withdraw from the TPP.
Earnings are also continuing to have an effect on individual stocks. DOW component MCD fell today and so did HAL. The DOW was also damaged today by declines in BA and DIS plus its energy components CVX and XOM. On the other hand, three of the four FANG stocks (FB, AMZN, and GOOG) were higher today. NFLX from this group lost 1.21.
Breadth numbers were slightly negative at a 15/16 downside ratio. The VIX was higher by 2% to 11.77 today.
The dollar weakened once again for its fourth straight lower week. The Euro was up to 1.0741 and the Japanese yen was down to 113.01 to the dollar. Naturally, gold was higher at $1,215 an ounce. Crude oil was lower again at $52.81 a barrel on a report of greater drilling activity. Bond yields were lower with the 10-year Treasury Note down to 2.39%.
Donald M. Selkin
These are excerpts from Don Selkin’s Daily Market Notes, abbreviated and updated with permission from the author. Don Selkin is the Chief Market Strategist at Newbridge Securities Corporation, member FINRA/SIPC and provides the Fair Value analysis for CNBC each morning. The commentary provided in this Market Letter is intended to provide timely market analysis and should not be considered a research report. This Market Letter may contain, and is limited to: Discussions of broad based indices; Commentaries on economic, political or market conditions; Technical analyses concerning the demand and supply for a sector, index or industry based in trading volume and price; Statistical summaries of multiple companies’ financial data, including listings of current ratings; and, Recommendations regarding increasing or decreasing holdings in particular industries or securities. This Market Letter does not make a financial or investment recommendation or otherwise promotes a product or service of the firm. This Market Letter contains only news, facts, and commentary on information previously reported from a news source believed to be accurate and reliable by the author. These news sources include the following: Bloomberg Financial, Reuters, and the Associated Press.