It’s finally inauguration week and it can’t get here soon enough. The period from Election Day to now has been anything but normal and I think traders would just as soon be done with the transition. Looking at this from a purely business perspective, the new administration brings optimism but concerns they will light the torch on a tariff war.
U.S. stock index futures gave up some gains on Friday after disappointing quarterly reports from Bank of America and Wells Fargo. Shares of Bank of America fell 0.7% to $22.76 in premarket trading after the lender's quarterly profit beat estimates, but its revenue fell short.
What does it all mean? One of two things is likely to happen because something important is about to happen because markets don’t line up like this every day. Either we are about to create a super bubble or it needs to drop right here. In a crazy market like this you can’t automatically assume anything; you can’t impose your will on the market. The higher probability should be a pullback.
The Dow came within one point of 20,000 for the first time on Friday and the Nasdaq and S&P 500 reached record highs, boosted by Apple, extending a two-month rally fueled by optimism about U.S. President-elect Donald Trump.
The market is going to skyrocket; the market is going down the drain. It’s the time of year when all the pundits make the predictions for they see in the tea leaves. For my part, I’m surprised it was able to recover and negate last year’s January effect. I think this year will bring us neither. I go back to Fed guidance for three rate hikes this year. How many times they hike rates is irrelevant.
The markets ended the week on a positive note on Friday as investors doubled down on a rally fueled by optimism that President-elect Donald Trump's policies will boost economic growth. The Dow Jones Industrial Average, which briefly came within striking distance of the historic 20,000 level earlier this week, recorded its seventh straight weekly gain.
U.S. stocks were lower in light trading on Thursday as a fall in Apple's shares weighed. Apple fell 0.8% to $116.38 after Nokia said it had filed a number of lawsuits against the iPhone maker for patent infringement. The stock was the biggest drag on all three major indexes.