Yahoo Finance All Markets Summit — What you need to know in markets on Wednesday
After last week’s data rush, this week is decidedly quieter and Wednesday will be calm on the economic data front as only the weekly report on mortgage applications will be set to cross the tape.
On the earnings side, Wednesday will be highlighted by earnings from Goodyear, Whole Foods, and Yum Brands.
And throughout the day, Yahoo Finance will host its first-ever All Markets Summit, featuring interviews with BlackRock CEO Larry Fink, Barclays CEO Jes Staley, and MLB commissioner Rob Manfred.
The full schedule can be found here and the entire conference will be live-streamed all day on YahooFinance.com.
“The Trump Trade”
Following Donald Trump’s win in the US election, stocks went into rally mode.
Investors decided that three pillars of Trump’s economic plans — lower taxes, infrastructure spending, and deregulation — outweighed any risks posed by potentially restrictive trade tariffs.
We’re now less than three weeks into the Trump era, but overall, we haven’t seen much movement on getting legislation through Congress on any of these issues.
Markets, meanwhile, have more or less been flat since hitting new records in mid-December, though the Dow’s first crack above 20,000 was a much-ballyhooed event. This mattered culturally, if nothing else. The White House was also excited.
But in recent days we’ve started to see more mentions of the low levels hit by the CBOE’s Volatility Index, referred to in markets only as the VIX or described by other market participants as the “fear index.”
We’ve seen the level of the VIX fall and a number of factors have been attributed to this, namely the lack of correlation among S&P 500 members which is driving down volatility in the overall index, as well as the VIX being just a reading of volatility expectations in the coming month, which could misrepresent longer-term anxieties in markets.
An idea, however, that we’ve started kicking around is that perhaps markets appear to be taking noisy headlines about Trump’s executive orders — or the lack of movement on his key economic initiatives — in stride because the investor class isn’t all that different from the average Trump voter.
Markets, we’re rightly told, are sociological institutions as much as they are economic ones. The market’s participants decide how the market acts, and it’s only in hindsight and with a top-down view that certain trends appear obvious.
The “Trump Trade,” then, was something built on the idea that everything good Donald Trump could deliver is something that he would deliver to the markets and economy. A Republican-controlled Congress and White House certainly leant credence to that idea.
It is, no doubt, early days in the Trump administration. We may very well see a package of economic reforms come through that boost the economy and extend the current economic expansion.
But the longer that we see commentary around the Trump administration and the market’s reaction to this diverge, the more it’s worth considering just who makes up the market.
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Myles Udland is a writer at Yahoo Finance. Follow him on Twitter @MylesUdland
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