Air of concern
The equity indices while moving higher, seem a bit cautious this week . Tax reform and healthcare legislation are still out there hanging over everyone’s head, but the markets have seemed to move higher all year in spite of those concerns. We are in crunch time (or so have been told) for picking the next Chair for the Federal Reserve.
The concern for market participants is all based on what kind of bird the possible candidates are perceived to be. You don’t have to be a trained ornithologist to figure out what is the difference between a hawk and a dove. The tougher challenge is determining if a hawk is a bear or a bull for the equity markets.
The Dow and S&P futures continued to trend higher through most of the session on Thursday. Both indices had fairly low volatility through the day, and were able to close positive. The S&P futures were +.15% and the Dow futures closed with a .21% gain.
The U.S. dollar Index was the story of the day, trading near 94.50 on the close and up 1.04% from the prior session. The ECB helped give the US Dollar a boost as they unveiled its taper plan going forward into 2018. The Euro currency took a big hit, down almost 160 points for a 1.34% hit from Wednesday’s session.
I’m looking for timid trading to continue until we get our official nominee for the Fed Chair. Friday trading in October had a long history of some wild rides, but I think we will avoid that tomorrow. Nothing seems to cap this run in the equities, but a little uncertainty about the future of the Fed may have slowed it down a bit.
John Weyer
Director Commercial Hedging
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