President-elect Donald Trump will be officially sworn in as 45th president today, and markets are largely taking a breather to focus on the festivities (and any surprises it may offer).
Naturally, the precious metals were mostly flat this morning in New York. Spot gold was just 0.27% lower, holding above the $1,200/oz mark. The story was mostly the same for silver prices, which lost just 2¢ (about 0.1%) to stay right around $17/oz. Meanwhile, platinum and palladium were both almost 1% in the green.
We can expect quite a bit of sideways trading action on the markets today, including the precious metals, as all of the attention will be focused on the historic presidential inauguration. An event that the media spent nearly a year and a half telling everyone was not even a remote possibility—Trump winning the White House—is finally becoming a reality. If this election cycle has been any kind of guide, don’t expect the incoming president to mince words as he lays out his vision for the country today. Aside from addressing the American people, you can bet that foreign governments from China to Germany to Mexico will be listening closely for more clues about how Trump plans to assume stewardship over U.S. foreign policy.
Stocks around the globe were mostly in positive territory early this morning as fourth-quarter earnings continue to be announced on Wall St. The results have been mixed. After sliding slightly lower on Thursday, U.S. indices were all trading about 0.5% higher this morning.
Barring a surprising or specific policy prescription coming from the inaugural address, the broader markets should remain subdued today. Then agian, Trump could always have a surprise up his sleeve that sends a particular company or sector reeling. Widespread celebrations and protests will provide something for the media to focus on. Caution seems to be the order of the day.
The dollar recovered some early-morning losses. The greenback traded near 101.25 on the DXY index, helped in part by a slightly stronger euro. The EUR/USD currency pair was trading above $1.067 this morning after recently falling as low as $1.04 in late December and early January. This would seem to be a bit of a correction following the market’s reaction to European Central Bank (ECB) President Mario Draghi’s dovish comments this week.
The performance of China’s economy last year is the main international news that markets are paying attention to on Friday. The People’s Republic announced robust 6.7% GDP growth in 2016, which was line with the government’s target and was helped by a strong fourth quarter.
However, this rosy flashpoint may have come at a dear price. The Chinese state pumped unprecedented fiscal stimulus into the economy (and took on a great deal of debt) in order to prop up the country’s heavily indebted corporations and uneven real estate market. Of course, the veracity of official statistics coming out of China is always somewhat questionable—though the same could surely be said of our own Bureau of Labor Statistics. On top of this, the People’s Bank of China has assured investors it will provide more accommodation and liquidity assistance as needed going forward.
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