US optimism back on track

Whilst a Federal appeals court will be listening to arguments on President Trump’s immigration order and more specifically whether the stay should be lifted or not, investors are instead turning their attention towards corporate earnings as they roll in.

The US open has seen a hefty dose of optimism and enthusiasm return to the markets with the Dow Jones and the Nasdaq hitting record highs in early trading. The S&P snapped a three-day winning streak in the previous session, which had been its longest winning streak so far this year; however, equities are firmly back on the front foot today, with almost all sectors posting gains and industrials and financials leading the charge.

Financials continue to rally

The likes of Goldman Sachs and JPMorgan moved northwards on continued optimism surrounding deregulation and the undoing of parts of the Dodd-Frank law. In the last three months the US financial sector has jumped over 21%; Trump policies spell boon time for the banks and investors are all too keen to take advantage.

GM down 4% after earnings beat

General Motors posted stronger than expected Q4 earnings and lifted its global car sales estimates over the next four years. The shares were trading firmly pre-market, however, post result comments on Trump’s planned boarder adjustment tax being too complicated pulled the price over 4% lower.

Energy sector under pressure

On the downside, energy stocks where languishing, to be expected given BP’s disappointing results and the sell-off in crude oil. WTi is trading back below $53 dollar the barrel, as concerns over the prospect of growing oil production in the US, in the wake of a rival in US shale production and softer demand from China weigh on the black gold.

Traders will now look towards the API crude inventory data later in the session. Should the inventory data come in weaker than expected then we could expect to see an uptick in crude prices and the bulls buy back into energy stocks. Conversely should inventories come in higher than expected downward pressure is expected to remain on the sector.