Market Overview: Investors are getting back into the swing of things following the holidays. To begin the new trading year, investors appear happy to keep buying stocks, and thus far there has not been any signs of the type of New Year selloff that was seen last January. The recent sense of economic optimism may be tested in the coming weeks and months, however, as the Trump administration takes over. Investors will be looking for quick signs of progress and follow through on many of the key issues discussed during the campaign.
Key Data Points: MBA Mortgage Applications this morning showed another decline in both new home purchase applications and refinancing applications. The refinancing index was down sharply compared to new home applications, however, as the recent, rapid rise in mortgage rates has taken a big bite out of refinancing activity.
The data highlight of the trading day will be this afternoon’s release of the latest FOMC meeting minutes. After the central bank raised interest rates for just the second time in a year last month, investors will be looking for further clues regarding the Fed’s plans and assessment of economic activity. Investors may pay even more attention than usual given the Fed’s forecast for three hikes in 2017 rather than two.
The rest of the week, investors will get the latest readings on Weekly Jobless Claims, ISM Non-Manufacturing, Non-Farm Payrolls, Factory Orders and more.
Outside Markets: Stocks have gotten off to a good start to begin the New Year, and are moving higher this morning in early trade.
The treasury market has seen a slowdown in the recent selloff that took place since the Trump election victory, although rates may continue to rise.
The dollar index is slightly lower today ahead of the Fed minutes, and could potentially be vulnerable to some profit taking. Gains in the greenback could potentially begin to slow here unless quick progress is seen from the Trump administration and the Fed remains on track for three rate hikes this year.
The Big Picture: Thus far, investors do not appear to be in any major hurry to reposition. Although gold and silver may be nearing a bottom, these metals may remain vulnerable to further selling if stocks continue their ascent and if risk appetite remains strong. The New Year may bring with it significant changes in economic and geopolitical policies, and the gold and silver markets could once again see significant buying interest on bargain hunting and long-term investment. In addition, as the aging bull market in stocks marches on, gold and silver could potentially benefit from any signs of a top being reached.
This market update is provided weekly with analysis. You can always check the gold and current silver prices by watching our on-site charts.