Markets weren’t quite sure which direction to move last week.
The Trump rally, which lost some steam, gained momentum early in the week. The Standard & Poor’s 500 Index finished January 19, the day before the inauguration, with its biggest election-to-inauguration gain since Bill Clinton won a second term in 1996, according to MarketWatch, and the Dow Jones Industrial Average remained within striking distance of 20,000, according to Yahoo!Finance.
On Friday, President Trump delivered his inauguration address, but it didn’t resolve the uncertainty that has been nagging investors. The speech mentioned infrastructure activity, brushed over stimulus spending and tax cuts, and leaned heavily into protectionism. Mr. Trump said:
“America will start winning again, winning like never before. We will bring back our jobs. We will bring back our borders. We will bring back our wealth. And we will bring back our dreams. We will build new roads, and highways, and bridges, and airports, and tunnels, and railways all across our wonderful nation. We will get our people off of welfare and back to work – rebuilding our country with American hands and American labor. We will follow two simple rules; buy American and hire American.”
The market response to Friday’s speech was subdued, according to Financial Times:
“…with U.S. stocks edging higher, Treasuries putting in mixed performances and the dollar easing back against its main rivals. Oil prices rose sharply amid hopes that producers would show compliance to a global deal to cut output. Gold initially struggled for traction but held above the $1,200 an ounce mark.”
All major U.S. stock markets finished the week slightly lower, and 10-year Treasury yields finished the week slightly higher.
https://www.ft.com/content/fe66322a-deb8-11e6-86ac-f253db7791c6 (or go to https://s3-us-west-2.amazonaws.com/peakcontent/+Peak+Commentary/01-23-17_FinancialTimes-Markets_Give_Muted_Response_to_Trump_Speech-Footnote_4.pdf)