Market Overview: Both gold and silver are slightly lower in early trade to kick off the new trading week. Gold prices hit a fresh multi-month high last week, and some profit taking and back-and-fill trade is to be expected. This week will feature plenty of economic data for investors to chew on. The most important part of the trading week will, however, be Tuesday night’s speech to Congress by President Donald Trump. Investors have been buying stocks based on the notion of major tax reforms and massive fiscal spending. Thus far, however, Trump’s plans to those ends have been largely lacking in detail. Investors will be looking for more details on the administration’s plans to grow the economy.
Key Data Points: The latest reading on Durable Goods Orders showed a rise of 1.8 percent, in line with consensus estimates.
The latest reading on the Pending Home Sales Index is set for release later this morning as well as the Dallas Fed Manufacturing Survey.
Investors will get plenty of other data points to chew on this week as well, including the latest readings on GDP, Chicago PMI, Consumer Confidence, MBA Mortgage Applications, Weekly Jobless Claims ISM Manufacturing Index, PMI Manufacturing Index and more.
There are also numerous Fed officials speaking this week. Investors will pay special attention to their commentary following recent commentary from the central bank that some deemed more on the dovish side of the ledger. Although a March rate hike is on the table, June still seems like the most likely time frame for further tightening from the Fed.
Outside Markets: Not surprisingly, markets are generally flat across the board this morning. Stocks are just below unchanged, while interest rates tick slightly higher and the dollar index loses a little ground. Investors could possibly be waiting for tomorrow night’s address to Congress before making any further moves.
The Big Picture: Trump’s address to Congress could potentially have a large impact on markets. Investors have thus far given the new administration the benefit of the doubt about its planned economic policies. Investors will, however, want to see concrete action at some point of the rally in stocks is going to continue.
A lack of more detail in tomorrow’s address could potentially set the stage for a sell-off in equities. If Trump indicates that solid progress is being made and that plans are in place, investors may look to keep bidding up equities. Investors may also pay special attention to the how the President is received by Congress following some issues in the headlines and rumors of a potential Republican break from the President on some key issues.
