Dow makes another high after spending the day in negative territory
While the Dow hit another all-time high on Friday, it was a slim gain of only 11 points after the index had spent the majority of the day in negative territory, only to be pushed to another record in the last 30 minutes of trading.
Consequently, this shouldn’t be interpreted as a rally that will necessarily see the last fortnight’s record-breaking run continue into the coming week. Of importance is the fact that financial stocks came under pressure, as this has been an extremely well supported sector, and because of its large index weighting it has been instrumental in driving the Dow to record-breaking highs.
There appears to be a hint of scepticism re-emerging. The run-in financials was mainly due to confidence in President Trump loosening regulatory policies in that sector. As questions begin to be asked whether substantial tax reform will materialise, it seems that faith in financial sector reforms may now be waning as investors pause for proof.
The NASDAQ also spent most of the day in negative territory before eking out a gain of 10 points, representing an increase of less than 0.2%.
The negative sentiment rubbed off on European markets as they closed prior to the late rally in the US. Similar sectors were sold down with financial stocks particularly taking a hit.
The FTSE 100 shed nearly 30 points or 0.4% to close at 7,243 points.
The DAX plunged 1.2%, closing at 11,804 points, while the Paris CAC 40 came off 1% to close at 4,845 points.
On the commodities front, oil pullback to US$54 per barrel.
Gold increased 0.5% to US$1258 per ounce, responding positively to market volatility.
There was good support for base metals as nickel rallied more than 2% to close at US$4.90 per pound, recovering some of the ground lost in the mid-week sell-off.
Zinc rallied approximately 1.7% to US$1.28 per pound, while lead was up approximately 1% to US$1.02 per pound.
Copper joined in the rally, finishing at US$2.67 per pound.
The Australian dollar came off substantially to finish the week at US$0.767.