Market Review 17.02.2017

US stocks came in strong last trading week as it reported new record highs. The same is true with the European market as companies released their Q4 earnings. The Japanese stock market registered a slight gain over the week while China continues unfolding its economic pressure. Now, let’s have the details.

US continues to gain after a more promising policy on hand:

The profit-driven policies promised by the current administration pose promising gains over the trading week. The administration directly quoted “something phenomenal in terms of tax,” after a meeting with executive officers in the aviation industry. Another important factor that boosts the optimism in the US market is what analysts consider the administration’s willingness to cooperate with the Republicans. The aim would be the entitlement spending reduction where representatives would be agreeable as long as there will be no effect on the beneficiaries.

On other news, the energy sector believes that the oil prices would still struggle as the OPEC’s agreement on oil cut production would be balanced out by more options on oil drilling and exploration technology improvement.

Dow Jones closed at 20,269.37, up by 197.91 (+0.99%) while NASDAQ closed at 5,734.13, up by 67.36 (+1.19%). S&P 500 and Russell 2000 performed slightly well, closing at 2,316.10, up by 18.68 (0.81%) and 1,388.84, up by 11.01 (+0.80%).

Oil closed at $53.85 per barrel (+1.6%) while gold is at 1,234.70, a decrease (-0.17%) compared to last week.

European market slowly improves:

The European Central Bank is making headlines again as deregulation of the banking sector is on the top concern of their plans. Current President Mario Draghi said that US President Donald Trump’s relaxation of banking regulations might result in another global financial crisis. He further added that the ECB would still continue with the current monetary policies despite slight improvement in the Eurozone market. Other news report the volatility of European bonds, especially in Greece and France. The French Presidential election is coming to a close and it poses as a factor for volatility.

Japanese market optimistic;  China, on the brink of Crisis

Nikkei 225 closed at 19,378.93, up by 2.44%, showing positive gains over the week. Meanwhile, the Japanese yen showed strength early but by the closing day, it reverts back to 113.5,  better than at the end of last year. US President Donald Trump and Prime Minister Shinzo Abe held a two-day summit last week. The meeting shed light on where the Japanese economy stands, as US is its most important trading partner.

China, meanwhile, is doing everything it could to salvage the declining Yuan. Investors were pressuring the country as most of them were moving out money from the country, leading further to the Yuan’s decline.

 As an Investor:

Monetary policies around the major global market are all trying to implement balanced and sustainable measures that would promote growth and sustainability. Setting aside the fact of the strengthening dollar, economies should be viewed in a holistic way, particularly in dependent countries where its currency is weakening due to the former scenario. This will enable proper assessments to be made.

Global markets are now driven by a slow-paced growth across other markets. Needless to say, the US economy growth is fast enough as more optimism is  driven towards its economic policies.

The equity market would be volatile in the coming weeks as earnings, elections, new policy measures, and political agendas are laid out for every analyst to see. Always focus on the long term goal and always diversify.