US divided as voting with cards trumped by protesting with placards

Published at Jan 23, 2017, in Features

While global markets were relatively measured despite the impact of Inauguration Day, the event couldn’t be viewed as one of reassurance.

At the top end of town, it was billionaire investor George Soros telling Bloomberg that uncertainty was at a peak and acknowledging his previous comments that a Trump victory was tantamount to electing a “would-be dictator”.

This reflected the mood in the streets as more than one million people, most waving placards that reflected their particular demographic or gender, turned out in protest.

One of Trump’s first ports of call after sign off was a meeting with the CIA where he publicly withdrew criticisms he levelled at his own intelligence agency earlier in the week. Arguably, a sound move given the degree of hatred reflected in the protests.

Consequently, it isn’t so much where markets finished last week but how they will be shaped by White House policy. It would appear from early signs that the Transpacific Partnership is dead in the water, and this was one of the key economic issues for Australia.

Japan and Canada are reportedly already looking for alternative strategies to facilitate trade, and issues regarding trade and foreign relations are shaping up as one of the key challenges facing the Turnbull government in 2017.

Looking at the raw numbers, the Dow and the NASDAQ finished up 0.5% and 0.3% respectively. In Europe, the FTSE 100 was down slightly after the release of the worst month on month retail sales figures in five years.

The Dax and the Paris CAC 40 were both up more than 0.2%.

Oil was the standout performer on the commodities front, gaining more than 2% as signs became evident that traction was starting to occur post the cuts in output.

Gold rallied from less than US$1200 per ounce to hit a high of US$1215 per ounce, but retraced late in trading to close at US$1210 per ounce.

Base metals continued trends that were evident throughout most of the week with nickel falling further, now down 10% from its thirty-day high of US$4.85 per pound to finish broadly in line with a four month low of US$4.36 per pound.

Copper was relatively flat, but there were good gains made by zinc and lead with both metals pushing up towards long-term highs.

The Australian dollar was relatively unmoved finishing just above US$0.75.

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