US stocks edged higher, but Federal Reserve Chairwoman, Janet Yellen offered no hints on interest-rate policy in speech today. The gathering of central bankers in Wyoming was of interest to investors, but as expected Federal Reserve Chairwoman, Janet Yellen, first on a roster of central bank speakers, offered no hints on interest-rate policy. European Central Bank president, Mario Draghi too kept to the symposium theme. His speech centred on the need to sustain openness in order to encourage productivity.
While the stock market remained unaffected, the dollar took a knock with the US dollar slipping against the Japanese yen. The euro and the pound rose against the dollar. The major indices all clambered out of the week's doldrums in the absence of any calendar events or market-moving news. The Dow was up + 0.14%, the S&P 500 was up +0.17% and the Nasdaq rose +0.12% .
The breadth of the recovery into positive territory was wide on the S&P 500 with ten out 11 sectors up. Individual gainers were tech company, Autodesk was up +3.94% after revealing stronger revenue and beating analysts' estimates. Signet Jewelers was up +3.53% and Advanced Auto Parts +2.90%. On the losing side were Ulta Beauty down -9.14%, TripAdvisor -3.69% and Broadcom -3.71%.
- Dow 21,813.67 +0.14%
- S&P 500 2,443.05 +0.17%
- Nasdaq 6,265.64 +0.12%
- Russell 2000 1377.45 +0.26%
- NYSE Composite 11,812.03 +0.32%
- Gold 1,296.3 +0.34%
- Oil WTI 47.80 +0.78%
- 10-Year Treasury 2.17 -0.02%
Yellen's last stand?
In what may be her last speech as head of Federal Reserve, Yellen's focused her remarks to the theme of the symposium "Fostering a Dynamic Global Recovery" and spoke of the cost of the financial crisis and defended the policymakers' response. She deemed that reform efforts had boosted the resilience of banks and the financial system, instilling discipline and reducing the problem of "too big to fail".
However, Yellen warned that, "Nonetheless, the scope and complexity of financial regulatory reforms demand that policymakers and researchers remain alert to both areas for improvement and unexpected side effects."
Draghi too adds a warning that "openness to trade is under threat, and this means that policies aimed at answering this backlash are a vital part of the policy mix for dynamic growth."
The chairwoman's term comes to an end in February 2018 and there has been no indications whether she will be reappointed by President Trump.
White House plans to push tax reform, but investors' confidence ebbs
The next item on the political agenda is to reform the tax agenda which Republicans are pinning their hopes on getting a legislative deal to pass both the House and Senate.
According to Politico, Trump's team and congressional leaders are moving forward and finding ways to pay for cutting individual and corporate tax rates.
Politico quotes an anonymous source familiar with the administration's tax talks as saying: “People are feeling optimistic because they do not see failure as an option. They’ve put all of their eggs in one basket now, and that basket is tax reform.”
Meanwhile, Texas readies itself against major Hurricane Harvey.