Pharma, bank stocks pull Wall Street lower

Once again, another Trump tweet, this time regarding drug prices, got the markets nervous and brought down the pharma index giving it its worst performance in six weeks.  The long awaited new Republican ACA replacement, this one unpopular even with their fellow Republicans, didn’t help either.  So healthcare was the theme of the day and brought the Dow down a modest 30 points.  The oddsmakers continue to cite an 85% probability that the Fed will raise rates ¼% at its meeting next week.  Volume remains on the tepid side at just 6.4 billion, once again indicative that today’s negative news didn’t really cause much concern.   

Wall Street slips on wiretap accusation, geopolitical worries

It seems between Trump’s latest 3 a.m. tweet rants about bugs planted in Trump Tower and Korea’s latest missile tests, investors have gotten nervous again about the President’s ability to stay on message.  The VIX “fear gauge” rose for the first time in four days and the Dow dipped mildly once again, this time 51 points.  But the S&P still trades at 18 times expected earnings and the 6.2 billion volume is well below average, so Wall Street isn’t too nervous … yet.  

Succinct Summation of Week’s Events 3.3.17

It's that time of week again for the traditional succinct summation with new record highs all around and jobless claims down sharply. How long can we stay above 21,000?  Next week may tell the tale.  Hope everyone enjoyed their weekend.  

10 Weekend Reads - 3/4/17

Per my usual Saturday nights, I again offer an intriguing reading list from our benefactor Barry Ritholtz.  This week's syllabus includes everything from French Impressionist art to a Columbia Journalism Review essay on how to fix the media.  This is what I love about finance -- there is absolutely nothing that is not relevant.  Studying is never a waste of time.  Please also note the very instructive graphic following that so neatly illustrates the past 156 year history of economic expansions.  Hope everyone is enjoying the weekend.  

Wall Street steady after Yellen signals rate hike this month

The whisper-thin 3 point bump in the Dow disguises today’s wild ride where the index lost almost 90 points early in the session and recovered to just about break-even by close.  So the “Wall Street steady” headline is not exactly accurate.  The good news is that there doesn’t seem to be anything but good news out there.  A Fed rate hike in the next two weeks now seems all but a done deal but there is now so much confidence that the stock market and economy in general can handle it that no one cares anymore.  This is quite a contrast from a year ago when even the slightest hint of a hike would send the markets reeling in horror.  The labor report due March 10^th is not expected to dampen this enthusiasm.  The odds makers have now elevated the likelihood of a hike from 44 percent earlier this week to 74 percent yesterday to 85 percent today.  Volume of 6.7 billion was just a little below recent averages. 

Wall Street retreats after surge; Caterpillar, financials fall

After yesterday’s enormous rally, it shouldn’t be at all surprising that today was greeted with a correction as investors wisely took profits sending the Dow down a reasonable 112 points but still just barely over the 21,000 mark.  Yellen will be speaking tomorrow so, with the expectations of a March rate hike going just this week from 44% to 74% today, chances are there will be another little boost after that.  Volume was above average at 7.4 billion. 

Dow pierces 21,000 after Trump speech, rate-hike chatter

Yesterday’s prognosticators predicted that last night’s speech would be very low on specifics and that investors wouldn’t care as long as it was very high on hope and optimism.  They were right.  The speech was very short on specifics and the markets were so bothered that re-energized investors went on a buying spree this morning pushing the Dow way up right out the gate and it pretty much stayed there all day closing with a huge 303 point gain and putting the index well past the 21,000 mark for the first time.  Welcome was the shift to a kinder and gentler Trump and a return to an era of good feelings.  The Fed helped too with remarks that a rate hike was likely coming in just two more weeks, a development that investors have taken as yet another sign of optimism that the Fed feels confident in the economy.  The manufacturing index was also reported at its highest since 2014.  The abundance of confidence and optimism also boosted volume to over 8 billion, way above the 6.9 billion average of recent weeks.