Investment Commentary –February 7th, 2017

Market Indices as of Market Close February 7th, 2017
Dow 20,090 (1.66% YTD)
S&P 2,293 (2.36% YTD)
NASDAQ 5,674 (5.41% YTD)
Gold $1,234 (52 Week Low $1,127 High $1,387)
OIL $52.21 (52 Week Low $38.10 High $56.24)
US 10Y Treasury 2.39 (52 Week Low 1.32 High 2.64)

Wall Street edges up as NASDAQ sets record high

U.S. stocks were little changed on Tuesday after key indexes hit record highs as oil prices turned lower and investors grappled with policy uncertainty under President Donald Trump. The Dow Jones Industrial Average and the Nasdaq Composite hit all-time highs just after the market opened, with the S&P 500 coming just shy of yet another record high.
Energy .SPNY was the worst-performing S&P sector, falling 1.3 percent. Chevron’s (CVX.N) 1.3-percent fall and Exxon’s (XOM.N) 0.6-percent drop were among the biggest drags on the S&P.
Oil prices were pressured by sluggish demand and evidence of a burgeoning revival in U.S. shale production that could complicate efforts to reduce a supply glut.

U.S. trade deficit falls as exports hit more than 1-1/2 year high

The U.S. trade deficit fell in December as exports hit their highest level in more than 1-1/2 years amid record shipments of technology products, but strengthening domestic demand points to further rises in imports, which could constrain economic growth.
The Commerce Department said on Tuesday the trade gap dropped 3.2 percent to $44.3 billion, ending two straight months of increases. The trade deficit rose 0.4 percent to a four-year high of $502.3 billion in 2016. That represented 2.7 percent of gross domestic product, down from 2.8 percent in 2015.
When adjusted for inflation, the deficit decreased to $62.3 billion from $63.9 billion in November.
President Donald Trump has blamed U.S. trade policy for the loss of American factory jobs and has vowed to make sweeping changes, starting with pulling out of the 12-nation Trans-Pacific Partnership trade pact.

As another “New Deal” program the Export-Import Bank is approved by Congress on this day. Its purpose is to breathe life back into the U.S.’s export business.

On tap for the rest of the week:
Thursday: Wholesale inventories, U.S. Census Bureau
Friday: Thomson Reuters/University of Michigan Index of Consumer Sentiment, preliminary result; U.S. import and export price indexes, U.S. Bureau of Labor Statistics; federal budget report, U.S. Department of the Treasury

The views presented are not intended to be relied on as a forecast, research or investment advice and are the opinions of the sources cited and are subject to change based on subsequent developments. They are not a recommendation, offer or solicitation to buy or sell any securities or to adopt any investments.