Six Year Dip
The Dow closed lower on Monday, the eighth session in a row with a lower close. That is the longest losing streak since 2011. The index was able to rally and close down 58 points, after being down nearly 200 points to start the day.
Concerns Remain
Friday’s pull of the health care bill, sent some jitters from D.C. over to Wall Street. Monday was the first full trading day to digest that situation. After buying into the idea of a business friendly, deregualtory environment on the horizon, many market players are wondering if it will still come into fold. The inability to pass a health care bill has the hangover effect of possible issues facing any tax reform or tax cuts down the road.
Handful of reasons
The failure to pass a health care bill is not the only reason for the Dow to drift downward. We are approaching both the end of the month and the first quarter. After the run to the upside to start the year, some profit taking is to be expected.
Nearby Outlook
Look for the market volatility to remain for the time being. It will need something new to drive the Dow back to 21,000, but don’t be surprised if we see an up day on Tuesday. I expect to see a lot of back and forth this week. A strong downward move could see 20,200 come into play, but I expect some buying into strong sell offs.
John Weyer
Director Commercial Hedging
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