ScaredyCatGuide thoughts on the 1st trading day of 2017!
Well ladies and gents, the first trading day of 2017 is in the books and it was....well, kind of uneventful on a whole.
However, we did see a few things of interest and received some fresh economic data.
Dow Jones Hunt for 20k
For those waiting for the Dow Jones Industrial average to pierce that big pyschological layer of 20k, you must continue to wait. Will be honest, it has taken longer than I expected. Figured it'd spike through before the new year and then we'd pull back as folks take profits in the new year to delay the tax hit.
We did see the volatility pick up a bit though as the Dow saw a 168 point trading range today, more than any day over the past week so that's good. Last week's moves during the holidays was unbearable and why traders generally take off that week.
This is probably the most I'll ever speak of the Dow, really it's just the 20k thing. In the end, the S&P 500 is what I watch most and is a more realistic indicator of the U.S. market.
U.S. Treasuries
The yields on U.S. treasuries have ripped higher since election day. This is good for fixed income investors, it is bad for borrowers (as I'm now experiencing in securing a mortgage on my next rental property)
So the wonder was, would we see more profit taking in the new year (as bonds have performed well up to the election) and thus push yields up. Surprisingly no, yields on the 5, 10 and 30 year treasury were all flat to slightly down.
Now granted, we are talking one day off action so it doesn't mean much, but I always like to see that first day reaction of the masses. Again, on a whole everything was rather mild across the board today.
Economic Data
The first trading day of the year saw positive economic data. The ISM Survey (which tracks manufacturing activity) rose to 54.7 in December, which was above estimates of 53.6 and a nice jump from 53.2 in November.
It seems President Elect Trump's tweets calling out companies for building elsewhere are having an impact already! (kidding, haha)
Conclusion
We are off into the new year and it will be interesting to see what the coming months will bring.
- Will the Fed Raise Rates again as expected?
- Will the Dow finally break that elusive 20k?
- Will the economy continue to grow?
We shall see my fellow steemites!
Regards,
Thanks for pic pixabay
Disclaimer: All info in this post is my opinion and for educational purposes only
great post
Thank you sir!
Thanks for sharing.
Sometimes it is the things you are not watching that are interesting. Check this one out - while Treasuries did very little, shorter term interest rates were all over the place.
One month chart of Sept 2018 3 Month Euribor futures. Price spiked up on Jan 2 - markets were open that day (yields lower) and then came back to exactly where they started [note: 1 month chart]
How about this one? - 4% drop in the afternoon trade. Some contracts were down 10%
March 2017 futures on natural gas. [note: Jan 3 day chart]
Yes, we definitely got some volatility back today. The USD/YEN made quite the intraday pullback today and the swing on the treasury yields was decent only to settle slightly lower.