 "Dynamic Capital")
US stocks slipped on Monday, driven by energy companies suffering falling oil prices that will likely impact their profit margins. Other factors contributing to the downturn include investors awaiting further clarity on Donald Trump’s economic policies and speculation ahead of the latest earning reports that are expected to be released shortly. After reaching record highs last week and going on a significant rally since Trump took office encouraged by hopes of fiscal stimulus, lower taxes and fewer regulations, the S&P 500 saw a downturn on Monday, February 6th, 2017.
The Dow Jones fell by a little over 19 points, and the S&P 500 was down 0.21%. Goldman Sachs economists are predicting the fiscal stimulus to occur in 2018 rather than this year, as there are other pressing priorities that Trump is pushing first, such as immigration and trade reform. Investors are waiting to see the positive and negative effects that come from the trade reforms being discussed in the White House before making significant long term investments. Nine of the eleven major industries tracked by the S&P ended lower overall, with the energy sector leading the way falling 0.9% as measured by the. SPNY.
Despite negative news coming from the energy sector, Hasbro, one of the largest toy makers in America jumped nearly 15% after they reported record holiday revenue after this past holiday season. Tyson Foods, one of the largest food producers, saw a 3.5% dip after they received a subpoena from US authorities coming from allegations that they were engaged in the fixing of chicken prices. So far, more than half of S&P 500 companies have already published their fourth quarter earnings, and two thirds of those reports have beaten the Wall Street expectations, an extremely encouraging sign for the health of the economy.
The market saw decreased activity, trading nearly a billion shares lower than the daily average over the last twenty sessions, a sign that though there was a selloff it may not hold too much momentum. Investors are also waiting to see the results of travel ban and what effects it will have on tech companies that say it will reduce their international competitiveness. Nearly 100 companies (including some of tech’s biggest names like Apple, Google and Microsoft) recently got together to file a legal brief against Trump’s temporary ban, arguing it would create incentives to move jobs outside America. On Friday, a federal judge in Seattle temporarily blocked the order, so investors are waiting to see the results of the dispute between executive and judicial branches of government, and how everything will affect profits.