Trump Inauguration on the horizon

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It’s the Trump Dump that is now dominating markets into Friday’s session after the President Elect’s news conference caused the US dollar to finally unwind some of the upside that has seen a lot of the US dollar majors break through long term support and resistance levels. There were no real silver bullets that killed the rally during the President elects press conference, however it just seemed that the markets had suddenly realised that we had seen this rally for too long.

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It was comments over his own businesses, on Russian hacking and his refusal to talk to certain journalists that were the big headline grabbers of the news conference, nothing that would cause a market move. Earnings news will now take centre stage for the coming week after a mix of bank earnings releases on Friday afternoon with Wells Fargo, JP Morgan and Bank of America all posting EPS beats, but missing on revenues. In fact JP Morgan was the only bank reporting today that beat the street on revenues and EPS.

Earnings in focus

There is a real intense focus on the Q4 earnings season in the next few weeks after the rally in the US dollar and equity markets showed signs of slowing down. After Donald Trump’s first press conference as President Elect last Wednesday markets started to fall lower with the US dollar and US equity markets both showing signs of a change of heart. However it was the 10 year bond auction after the presser that was a bigger catalyst for the downside after the auction got very little interest. The bond markets are always deemed to have the smarter money in them so can be seen as an leading indicator to a trend reversal.

With earnings season starting in an unspectacular fashion we will now focus on the earnings for the week ahead as Morgan Stanley kicks things of on Tuesday after the Martin Luther King day holiday. Financials will be a focus as ever, however the FANG stocks will also be a huge focus when they finally start to report their figures, Netflix will be the first of these to report on Wednesday.

Facebook – 01/02/2017
Amazon – 26/01/2017
Netflix – 18/01/2017
Alphabet (Google) – 26/01/2017

Trump Inauguration

Next Friday has one of the biggest events of the first quarter happening as final Donal Trump will become the 45th President of the United States of America. Now usually any kind of political speech or event is widely ignored by traders, however a Donald Trump speech is a little different to normal. We just have to look at the press conference last week to see just what sort of market moves we could get.

So on Friday the markets will be closely watching the new President as he makes his inauguration speech from The Capitol, yet again he may not have to say anything about fiscal policy or the economy in order to get some volatility from the major markets. Markets are nervous at these higher levels and by the time we get to Friday’s inauguration we will have had a lot more earnings so will have a clearer picture whether the earnings are currently supporting the upside.

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