Thursday, January 12, 2017

Dow Futures Descend As Analysts Question The Trump Rally

‘Trump presidency is unlikely to be a one-way bet’


By Victor Reklaitis
MarketWatch
January 12, 2017

U.S. stock futures lost altitude Thursday, putting the Dow on track to give up much of the prior day’s gain as analysts continued to digest President-elect Donald Trump’s news conference.

Dow Jones Industrial Average futures YMH7, -0.20% shed 44 points, or 0.2%, to 19,833, while S&P 500 futures ESH7, -0.28% gave up 7.10 points, or 0.3%, to 2,263.50. Nasdaq-100 futures NQH7, -0.26% fell by 13.25 points, or 0.3%, to 5,033.25.

Biotech stocks will try to recover following a slump Wednesday when Trump said companies were “getting away with murder” with respect to drug prices.

Those remarks were a warning to that sector and other sectors of the president-elect’s tendency to adopt a scattershot approach to domestic policy, said Michael Hewson, chief market analyst at CMC Markets, in a note on Thursday.

“The Trump presidency is unlikely to be a one-way bet for stock markets,” Hewson added.

Investors are waiting for a flurry of Federal Reserve speeches, as well as fresh data on import and export prices, and jobless claims.

On Wednesday, the Dow DJIA, +0.50% gained nearly 100 points, or 0.5%, closing less than 50 points from the 20,000 mark. The S&P 500 SPX, +0.28% tacked on 0.3% to end less than 0.1% from Friday’s all-time closing high. The Nasdaq Composite COMP, +0.21% added 0.2% and scored its fifth record close in a row.

Other markets: Oil futures CLG7, +1.11% and gold futures GCG7, +0.63% traded higher, helped by a drop for the dollar DXY, -0.68% . European stocks SXXP, -0.22% traded lower, and Asian markets mostly lost ground.

Economic news: Reports on import and export prices, and weekly jobless claims are slated to hit at 8:30 a.m. Eastern Time. Economists polled by MarketWatch expect 258,000 claims.

A flurry of Federal Reserve officials are expected to speak, starting with two events at 8:30 a.m. Eastern: Philadelphia Fed President Patrick Harker talking in Malvern, Penn., and Atlanta Fed President Dennis Lockhart and Chicago Fed President Charles Evans taking part in a panel discussion in Naples, Fla. Lockhart is also due to give a speech at 11:30 a.m. Eastern.

At 1:15 p.m. Eastern, St. Louis Fed President James Bullard is due to talk to the Forecasters Club of New York, and Fed chief Janet Yellen has a town hall meeting with teachers in Washington, D.C., at 7 p.m. Eastern.

Individual movers: Shares in Delta Air Lines Inc. DAL, +1.28% are likely to see active trading as the carrier is due to post quarterly earnings before the open.

Shares of Applied Optoelectronics Inc. AAOI, -0.66% may be active after they jumped 19% in after hours trading Wednesday. The optical network equipment company forecast earnings well above its original outlook.


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