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Bob Carey
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  US Stocks Ended Jan. 13, 2017
Posted Under: Weekly Market Commentary

 
Equity markets fell slightly this week with the S&P 500 returning -0.1% and the Dow Jones Industrials -0.4%. Equity returns appear to be normalizing after the first month of the 'Trump Rally' where the S&P 500 returned 5.2%, but only 1.4% since. The same has been true in the small and mid-cap space, as the S&P 1000 Index returned 14.0% the first month, and -1.4% since. This week biotech stocks felt the full pressure of President-Elect Trump. The Nasdaq Biotechnology Index plunged as much as -3.2% during the President-Elect's first press conference since the election, the fall started after he stated the drug industry needed "more competitive drug bidding." Biotech names did recover to close the week slightly positive. Congress was also busy with both the Senate and House of Representatives passing a budget reconciliation bill which could pave the way for a quick repeal of Obamacare after next Friday's Presidential Inauguration. Turning to individual names, both the EPA and U.S. Justice department have been further investigating Fiat Chrysler Automobiles over allegations the auto maker was cheating emission standards. The news sent the stock down over -6.6% for the week. Illumina Inc. was up nearly 15% this week, after an announcement their new DNA sequencer could enable them to sequence a genome in less than an hour for merely $100. Mega-cap banks, Bank of America Corp., JPMorgan Chase & Co. and Wells Fargo & Co. all had positive quarterly earnings news this week, as the sector continues to profit from higher interest rates. Looking ahead to next week, equity markets will be closed on Monday in honor of Martin Luther King Jr. The political landscape in America might soon look very different as President-Elect Trump will have his Inauguration on Friday. We expect a flurry of political activity the next few months which will likely impact equity markets. Some major campaign promises from the President-Elect include the repeal of Obamacare along with a replacement plan, personal and corporate tax reform, swaths of deregulation and significant trade negotiations.
Posted on Tuesday, January 17, 2017 @ 8:26 AM • Post Link Share: 
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These posts were prepared by First Trust Advisors L.P., and reflect the current opinion of the authors. They are based upon sources and data believed to be accurate and reliable. Opinions and forward looking statements expressed are subject to change without notice. This information does not constitute a solicitation or an offer to buy or sell any security.
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