Market Commentary 4/3/2017
The story this week has been the strength of equities. With the Dow Jones smashing through the 2100 level, it has dragged the rest of the global equity markets up with it…perhaps too far and unjustified! With the success of Snapchat this week, 44% up on first day, maybe another equity bubble is beginning!
President Trump has improved his image this week with his first address to Congress. His address was very structured rather than many of his off the cuff speeches since his Presidency began. I believe this is the beginning of trying to win Congress over to pass his Executive Orders. He provided further insight into his expansion plans for the USA. However, he is yet to explain how he will finance this and of course, may have his plans trimmed by Congress due to testing the debt ceiling.
Here in the UK, triggering article 50 is remaining a challenge for the government as the House of Lords added an amendment regarding immigrants already in the UK, although the government can bypass this it is highlighting key issues. For May, this would be a difficult promise as she needs to keep this as one of her bargaining chips.
Pressure is building all round for there to be a final vote once terms have been agreed; although quarterly reports may be agreed to by the government.
Markets seem to be more politically motivated at present rather than economically driven, with Brexit, Trump, and 3 European elections. However, that said; all eyes are on the Fed for their meeting middle of this month with high expectations of a rate hike. Next Fridays NFP will perhaps provide the best insight into this.