Market Overview: Markets still appear to be trying to figure out what they want to do. Financial markets have thus far not behaved in the way many thought they would given a Trump election victory. Risk appetite appears to be relatively high once again, and despite the protests and some of the negative commentary in the media, some people seem to be genuinely optimistic about the economic future. Markets are seeing some significant movement again today, and it may be some time before things really begin to settle down. Of course, a Trump Presidency comes with many unknowns, and markets could remain vulnerable to heightened volatility until more clarity is seen on the President-Elect’s plans and policies.
Key Data Points: The latest reading on Consumer Sentiment this morning showed a reading of 91.6, well above consensus estimates of 87.1. This is the best reading since the beginning of the summer, and shows a good degree of optimism.
Banks are closed today for the Veteran’s Day Holiday, and lighter trading volumes could potentially exacerbate any market movement.
Outside Markets: Stocks are slightly lower today as investors are still digesting what a Trump victory could mean for the economy and financial markets. The Dow recently carved out fresh all-time highs, and the broad market S&P 500 is not far from fresh highs. Although many analysts had called for massive market volatility and the potential for a significant sell off, stocks have recovered following the election night selling and volatility.
Crude oil is weaker today which could potentially be weighing on equity markets, and a move back below the $40 per barrel level will almost certainly gain investors’ attention.
Interest rates have been on the move, with bonds and notes selling off and breaking some key support levels.
The dollar index is slightly higher today, and is within striking distance of recent highs. The greenback appears poised for further upside, which may act as a significant drag on the precious metals complex.
The Big Picture: Markets could potentially see some significant movement in the coming weeks and months, although whether or not the current stock rally is sustainable remains unclear. Given the amount of unknowns going into a Trump Presidency, it is quite possible that gold and silver will find willing buyers once the selling has subsided. This could, however, see gold fall to $1200 or lower before finding more solid footing.
