Market Commentary, 05/23/17
The major averages moved higher for the fourth straight session, largely offsetting the sell-off last Wednesday. In fact, the Dow closed today at 20,937, just 0.2% from last Tuesday’s close, while the S&P finished within 0.1%, closing at 2,398.
Many traders felt the pullback last Wednesday was overdone amid lingering optimism about President Trump’s ability to implement his pro-business policy agenda. This optimism as largely due to what appears to be an overreaction to allegations by Ex-FBI Director James Comey that President Trump asked him to cease the investigation of his ties to Russia which, at least as of now, are unfounded.
The markets continue to benefit from the upward momentum seen in recent days, which has helped lift the major averages well off their lowest levels in nearly a month. This rise has been helped by strong earnings; according to FactSet, 75% of companies in the S&P 500 that have reported earnings, have beaten estimates.
The market is still awaiting tomorrow’s release of the minutes of the latest Federal Reserve meeting. The minutes of the meeting held earlier this month may shed some additional light on the outlook for interest rates ahead of the next meeting in mid-June. The Fed is widely expected to raise interest rates next month, with CME Group’s FedWatch tool indicating a 78.5% chance of a quarter point rate hike.
It seems investors feel cautiously optimistic about the state of the economy. The quick recovery from the Dow’s 372 point drop last week, a likely third consecutive rate hike, and the growth-centric initiatives of the Trump Administration all point to a continued expectation of market appreciation in the foreseeable future.
Wayne Copelin, CFP®
President, Copelin Financial Advisors, Inc.
514 Brooks Street
Sugar Land, TX 77478
Phone (281) 240-2902
Fax: (281) 240-2856
Securities offered through ProEquities, Inc., a Registered Broker-Dealer and Member FINRA & SIPC Advisory Services offered through Harvest Investment Services, LLC., a Registered Investment Advisor Copelin Financial Advisors, Inc and Harvest Investment Services, LLC are independent of ProEquities, Inc.