Could Trump's Inauguration Mean A Top For Stocks?
The stock market has soared to new all-time highs following the election of Donald Trump to the White House. In the now infamous Trump Bump –traders have priced in a spate of good news including tax cuts, deregulation and massive infrastructure spending.
Wednesday's press conference and the inauguration will see a switch in market drivers from speculation on what Trump may do to what he actually does.
Buy The Rumor, Sell The Fact
The stock market is notorious for a phenomenon called "Buy the rumor, sell the fact" in which traders price in news before it has happened and then dump stocks once it occurs. There are growing rumblings among market watchers and traders that Inauguration Day could mark a top in the stock market.
Analysts are warning that the stock rally and the massive gains in the U.S. Dollar have hit an "exhaustion phase" and are vulnerable to a correction. The recent rally in stocks has been accompanied by weakening stock market breadth, as the number of declining stocks outnumbers gainers. That is a weak signal for the stock market overall.
Gold Is Starting To Move Higher
Gold prices have been climbing in recent weeks as a small bottom has formed on the daily chart at $1,124.30 for Comex February gold futures. Gold hit a high at $1,190.50 in early trading Tuesday – a $66 per ounce move in just three weeks.
If you are a first-time gold buyer, or if you are looking to add to
your existing position, you may not want to wait any longer. Gold
prices are rising again, with higher levels seen throughout the year.
"We forecast gold prices to average $1,420 in 2017," says Thomson
Reuters in their Gold Survey 2016 Q3 Update and Outlook
Call Blanchard at 1-800-880-4653 to discuss your investment goals
with one of our portfolio managers now.
Politics – The Next Big Trigger For Gold?
"As Mr. Trump’s inauguration date nears, we suspect gold investors will monitor political developments more closely. Any significant ratcheting higher in geopolitical tensions could help trigger safe-haven bullion demand. The market may be more sensitive than usual to political developments in the early days of a Trump Administration," according to a January 9 HSBC research report.
Blanchard is the premiere tangible assets adviser in the United States for serious investors and serious collectors. Learn more about our firm here.