Trump euphoria continues to drive Wall Street to new highs

Published 06-MAR-2017 10:02 A.M.

|

3 minute read

Hey! Looks like you have stumbled on the section of our website where we have archived articles from our old business model.

In 2019 the original founding team returned to run Next Investors, we changed our business model to only write about stocks we carefully research and are invested in for the long term.

The below articles were written under our previous business model. We have kept these articles online here for your reference.

Our new mission is to build a high performing ASX micro cap investment portfolio and share our research, analysis and investment strategy with our readers.


Click Here to View Latest Articles

President Trump’s address to Congress fired up US equities markets overnight as he reiterated his stance on infrastructure spending, tax breaks and an easing of regulatory conditions within financial markets.

However, one has to question his ability to deliver, something he hasn’t been able to explain to date. While Trump’s playbook is very different to Barack Obama’s, he still carries the same record levels of debt.

That being the case, it could be argued that he needs to explain how the books will be balanced with lower income being generated through tax cuts and increased expenditure required in order to fund infrastructure projects.

Scott Shellady, a well-respected Wall Street commentator and trader generally has a positive view on markets, and his iconic bulls hide jacket tells the story. In the video below which was shot in January he pointed to several economic factors which demonstrated that markets were running on hype rather than substance.

It is worth noting that this video was taped on January 6 when the Dow was sitting just below 20,000 points.

Shellady reiterated these thoughts after the market closed last night, saying the market was priced for perfection, arguably conservative at a stage when many analysts are saying it’s overcooked.

Numbers don’t lie – or do they?

However, if the old saying ‘numbers don’t lie’ is applied to the current situation there is no doubting the fact that market sentiment is extremely positive.

The Dow breezed past the 21,000 point mark, closing at 21,115 points, a gain of 1.4%, and the fastest 1,000 point increase in history. The NASDAQ followed suit, increasing 1.3% to close at 5,904 points.

Interestingly though, the gold price is holding in the vicinity of US$1,250 per ounce, perhaps indicating that some investors may be using it as a hedge should markets unravel.

The bullish conditions were contagious as the FTSE 100 stacked on 120 points to close at 7,382 points.

There were even stronger gains in mainland Europe with both the DAX and Paris CAC 40 up by about 2% closing at 12,067 points and 49,60 points respectively.

Base metals all trended higher with zinc and lead putting in the best performances as they gained more than 1% with the former closing at US$1.29 per pound after touching US$1.31 per pound earlier in the session.

There was little movement in the iron ore price as it continued to hover in the vicinity of US$91.00 per tonne.

Oil came off 0.6% to finish at US$53.67 per barrel.

The Australian dollar is fetching approximately US$0.77.

Australian markets are expected to open substantially higher on Thursday with the financial sector leading the way and miners benefiting from overnight commodity price movements, as well as being supported by the underlying theme that infrastructure spending will generate demand for metal products, and the flow on impacts of fiscal stimulus will see an uptick in consumer spending on everything from houses to toasters.

Looking at the possible near to medium-term flow on impacts, the likelihood of a Fed rate hike in March has strengthened, and this could be a catalyst for Australia to follow suit.

It should be noted that broker projections and price targets are only estimates and may not be met. Also, historical data in terms of earnings performance and/or share trading patterns should not be used as the basis for an investment as they may or may not be replicated. Those considering this stock should seek independent financial advice.



General Information Only

S3 Consortium Pty Ltd (S3, ‘we’, ‘us’, ‘our’) (CAR No. 433913) is a corporate authorised representative of LeMessurier Securities Pty Ltd (AFSL No. 296877). The information contained in this article is general information and is for informational purposes only. Any advice is general advice only. Any advice contained in this article does not constitute personal advice and S3 has not taken into consideration your personal objectives, financial situation or needs. Please seek your own independent professional advice before making any financial investment decision. Those persons acting upon information contained in this article do so entirely at their own risk.

Conflicts of Interest Notice

S3 and its associated entities may hold investments in companies featured in its articles, including through being paid in the securities of the companies we provide commentary on. We disclose the securities held in relation to a particular company that we provide commentary on. Refer to our Disclosure Policy for information on our self-imposed trading blackouts, hold conditions and de-risking (sell conditions) which seek to mitigate against any potential conflicts of interest.

Publication Notice and Disclaimer

The information contained in this article is current as at the publication date. At the time of publishing, the information contained in this article is based on sources which are available in the public domain that we consider to be reliable, and our own analysis of those sources. The views of the author may not reflect the views of the AFSL holder. Any decision by you to purchase securities in the companies featured in this article should be done so after you have sought your own independent professional advice regarding this information and made your own inquiries as to the validity of any information in this article.

Any forward-looking statements contained in this article are not guarantees or predictions of future performance, and involve known and unknown risks, uncertainties and other factors, many of which are beyond our control, and which may cause actual results or performance of companies featured to differ materially from those expressed in the statements contained in this article. S3 cannot and does not give any assurance that the results or performance expressed or implied by any forward-looking statements contained in this article will actually occur and readers are cautioned not to put undue reliance on forward-looking statements.

This article may include references to our past investing performance. Past performance is not a reliable indicator of our future investing performance.

 

Discover Small Cap
Biotech Stocks

Join thousands of other Investors following our stock commentary for Free

X