Mnuchin Supports Strong Dollar
|Today's Highlights
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Flat Jones (DJ30)
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Mnuchin Supports Strong Dollar
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Hail to the Yellow Haired Chief
Please note: All data, figures & graphs are valid as of January20th. All trading carries risk. Only risk capital you can afford to lose.
Market Overview
Going into this most momentous day markets around the world are quiet... perhaps a bit too quiet. Everything was rising hard and fast for the period between Trump's election on November 8th and the Federal Reserve rate hike on December 12. Since then things have levelled off.
In fact, the DJ30 has not moved more than 1% up or down since mid-December, making this the flattest period for this index EVER.
Our clients, though they were extremely bearish last week have also levelled off a bit, with the sentiment showing 77% bearish on the Dow. This, as 5 of the last 6 trading days closed in red for this index.
Asian markets are very mixed, not only in their performance but in volatility is well. There just doesn't seem to be any consensus among global stock markets at the moment.
The Weak Strong Dollar
The currency markets on the other hand are alive and moving. Oddly enough, the US Dollar is the loser so far today.
This is strange considering comments from two major players...
1. Janet Yellen in a speech last night stressed that interest rates are set to rise.
2. Steve Mnuchin, Trump's chosen Treasury Secretary supported the strong Dollar policy in his hearing yesterday. Explaining that Trump's comment about the Dollar being too high was intended for the short term, but for the long term the green back should rise.
In any case the Dollar is down for now, so if you are looking for a good entry point to get in you may be able to find it today.
The Inauguration
Trump's been planning this for 2 months and will likely be the biggest party of his life.
As far as trading opportunities, it's not so clear. Several traders on the eToro network are expecting to see some declines in the stock indexes, they're even calling it "buy the election, sell the inauguration."
Either way, it may be a good idea to moderately reduce your exposure on any risky assets and monitor the markets closely throughout the day. If things start getting out of control feel free to jump right in.
The more important thing that people will be looking at are the first few weeks and months of his presidency, that should give us a better picture about how to invest for the long term.
Have a fantastic weekend!
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