Winners and losers of Trump.
Donald Trump shocked the world last week with a historic win in the United States Presidential Election. Equities sold off sharply as the election results started to come in, but by the end of the week, the market had settled generally higher again. The Dow Jones made a new high, but the broader market has yet to follow. Given the huge rally we’ve seen in some areas of the market, it’s hard to believe that the S&P 500 is only up 1.35% and the Nasdaq 100 is down 1.65%. Year-to-date, the Nasdaq is now underperforming the S&P 500 and Dow. The opposite was the case at last Tuesday’s close.
We saw a clear redistribution of the money because of the possible consequences of the new president-elect could do in the economics, and the financial sector has been the clear winner since Trump’s victory. The sector is up 11.21% since Tuesday. Up until last week, the Financials had been one of the worst performing sectors of the market in 2016, but now it’s one of the best. On the flip side, we’ve seen Consumer Staples, Technology and Utilities all post declines since Trump’s election.
Also we can see effects in the commodities markets, because the president-elect Donald Trump’s plan to spend on big projects could send inflation up, which in turn would help gold. Gold prices spiked nearly 5 percent last week on risk aversion as results the presidential results rolled in but have since sinked to a six-month low on Monday as the dollar strengthened. So maybe is an great opportunity to buy the precious metal. Speaking about commodities, on the coming weeks the new star will be the oil, because later on November 30th in Vienna, members of the Organization of Petroleum Exporting Countries (OPEC) will meet to discuss the possibilities of a successful production freeze.
Today the European stocks opened higher as The FTSE 100 was up +0.83 percent and the Germany Dax +0.20 %. We don’t have important macro economics data in the agenda for the present week, but all the focus will still present in the Trump’s economic policies.
The U.S. dollar stood near a 13-and-a-half-year high, as traders anticipate President-elect Donald Trump’s policies will stoke inflation. Traders see about a 45 percent chance the European currency will sink to $1 by the end of 2017, about double the probability assigned a week ago, data compiled by Bloomberg. Today the eur/usd started in the morning higher, but with a lot of chances for another correction to the end of the day.
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The company looks to be in good shape going forward. In its 3Q report, Coca-Cola announced beating expectations on both earnings and revenue. While revenue was down, much of that was due to currency issues and some restructuring costs. Volumes were actually up and show good promise for the future. For a long term positions, we expect the point of support at 41.14 can offer opportunities to buy.
Graphics by: www.etoro.com
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