S&P 500 hits record; stocks rally globally; the week ahead
Yesterday, the S&P 500 hit a record high, prompting rallies around the globe. What spurred this movement? Probably President Trump. The commander in chief reassured investors that details of his pro-growth policies are coming soon, and claimed to have a “phenomenal” tax plan on the way. At the beginning of last week, speculation was rife that optimism in the stock market over Mr. Trump’s presidency may be petering out; yesterday, that proved to not be the case.
Today and tomorrow, Federal Reserve Chairperson Janet Yellen will make her semiannual testimony to congress: to the senate committee this afternoon, and a House panel on Wednesday. The theme, as always, will be the health of the U.S. economy – and this time around, Yellen will have the opportunity to weigh in on the promise of Donald Trump’s economic policies.
She is, however, unlikely to take that opportunity, as so much of it remains shrouded in mystery. Not only are we unsure exactly how Mr. Trump plans to accomplish his oft-repeated goals, but we’re yet to see how Congress will react to his plans. According to Mark Zandi, chief economist at Moody’s Analytics:
“A lot of what the Federal Reserve will do this year will depend on what President Trump and Congress do, and at the moment we have no idea what will emerge from Congress. Until there is some clarity about what President Trump and Congress have in mind, I think the Fed is going to be cautious."
According to Diane Swonk, chief economist at DS Economics, Yellen “is going to want to fly under the radar as much as possible this week.”
Today also sees the release of CPI numbers from the UK, with the U.S. equivalents arriving tomorrow.
The opinions in this article do not reflect those of Dominion Fund Management Limited, and in the instance of any forward-looking statements, these should not be construed as advice.
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