Stocks fall, dollar regains ground ahead of Trump speech
- Author: Zachary Reyes Mar 02, 2017,
Mar 02, 2017, 17:30
Oil futures dipped as OPEC-led output cuts were offset by concerns about increasing USA crude production.
While a lot of investors were thinking that Trump would be unveiling a lot of details of pro-business policies, including cash repatriation, tax reform or infrastructure spending in his address to the Congress this Tuesday night.
Investors anxious whether Trump would be able to reveal any concrete plans to realize his campaign promises and some mentioned the possibility of a USA equities correction.
The euro edged up just 0.2 percent to $1.0583, as concerns that far-right anti-EU leader Marine Le Pen could win France's upcoming presidential election continued to weigh on the single currency.
In late-afternoon NY trading, the Dow Jones Industrial Average was down 31.19 points, or 0.15 percent, to 20,806.25, the S&P 500 had lost 7.73 points, or 0.33 percent, to 2,362.02 and the Nasdaq Composite had dropped 39.10 points, or 0.67 percent, to 5,822.80.
The Dow Jones Industrial Average scaled its 12th consecutive record high, its longest such run since 1987.
But Wall Street, which has sent stocks to record highs on anticipation of Trump's tax cut plans, has grown impatient and could react negatively to a lack of substantive details about the plan in Trump's speech, financial analysts said. Robert Kaplan, Dallas Fed President said that the U.S. central bank needs to raise their interest rates in the future to avoid falling behind on the curve of inflation.
United States 10-year Treasury notes were last down 7/32 in price to yield 2.342%, from a yield of 2.317% late Friday. "We are very focused on other aspects and that's what's very important to us, and that's the [US] president's priority".
They knocked the dollar back and it was trading down 0.2 percent against a basket of other major currencies at 100.82, leaving it slightly down on the week and facing its first weekly loss in three.
There was a reversal in the greenback's earlier weakness and Japanese yen has weakened indicating that a rate hike might be highly likely in the coming months.
"I'd say the fundamental driver is interest rate differentials", said Marc Chandler, global head of currency strategy at Brown Brothers Harriman in NY. Brent crude settled down 0.6 percent at $55.59 a barrel while USA crude fell further to $53.94 after settling down 0.07 percent at $54.01.
The spot gold turned down to $1251.3 an ounce by 0.4% as their inability to hold above a 200 day moving average was a clear source of some technical weakness. The precious metal had risen to US$1,263.80 earlier in the day, its highest since November 11.