Good morning. Here’s what’s happening as Monday begins and White House goes to war with the press over dubious claims about crowd sizes at Trump inaguration.
First, the scoreboard: (8:10 am AEDT)
• Dow: 19827 +95 (+0.5%)
• S&P 500: 2271 +8 (+0.3%)
• SPI 200 Futures (March): 5,627 +2.5 (+0.04%)
• AUDUSD: 0.7562 +0.0002 (+0.03%)
1. Haven play already: Investors fled to safety after Donald Trump was sworn in stark contrast to risk on in the days following his shock election win. Treasuries climbed with gold following a fiery inauguration speech that promised to upend the political establishment. The dollar fell, while the Mexican peso, which became something of a gauge of Trump’s prospects during the months leading up to the election, rose. Futures are pointing to a flat open for Australian shares.
2. Impossible promises?: As part of the inauguration of President Donald Trump, the new White House rolled out a number of policy promises on its website. One of them is a 4% GDP promise, which Trump has made before, but now it is the official promise of the White House and the president. The only problem is delivering on this promise will be incredibly difficult to keep.
3. Dimon says America to be better in 10 years: America is going to be better in 10 years than it is today and people should take a deep breath and think more about what’s going to happen long-term and not just tomorrow, JPMorgan’s CEO Jamie Dimon says. Donald Trump has put some professional people around himself and “hopefully when we go from one-liners — forget the one-liners and tweets — to serious policy, maybe we’ll do the things that help America grow better and help the average American,” he says.
4. Trump’s energy plan: America must take advantage of the estimated US$50 trillion in untapped shale, oil, and natural gas reserves, says the president just when US oil-rig count resumed its climb this week, rising by 29 to 551 according to Baker Hughes. It was the biggest one-week increase since April 2013.
5. Fed view: Morgan Stanley says the market is likely to stay close to pricing 2 Fed rate hikes this year for now until there is more clarity on the outlook for fiscal policy and trade policy. Focus in the coming week is probably going to be on initial actions taken by the Trump Administration on regulation and trade policy and any guidance on the strategy and timeframe for pursuing Obamacare repeal and then tax reform, it says.
6. Iron ore retreats: Iron ore spot markets continued to retreat on Friday, undermined by a drop-off in activity and softer sentiment ahead of Chinese New Year celebrations.According to Metal Bulletin, the spot price for benchmark 62% fines fell by 0.7% to $US80.41 a tonne, leaving it at the lowest level seen since January 11.The losses for lower grade ores were even larger with the price for 58% fines sliding by 2.53% to $US59.17 a tonne.
7. Dollar treading water: The Australian dollar is steady in early trade on Monday morning, clinging onto gains late Friday following the inauguration of Donald Trump as the 45th president of the United States.
8. Macquarie’s commodities outlook: Macquarie says commodities will be supported as the industrial recovery matures though trade protections may result in a twi-tiered pricing structure. It expects US natural gas, zinc, cobalt, uranium and silver to outperform in a 12 to 24 month period. Potash, alumina, steel and nitrogen will be challenged.
9. Brexit means lower income: UK Prime Minister Theresa May’s plan for a “hard Brexit” will lower UK incomes and cost up to 10% of GDP over 15 years, according to analysts at Bank of America Merrill Lynch.
10: Bexodus help: Marcin Czyza, a Polish commodities trader working in Amsterdam has started a project called Expat Exit that aims to help foreigners working in the UK find new jobs in other countries in the wake of the Brexit vote.
Monday bonus: Madonna, an icon of both pop music and feminism said she thought of blowing up the White House in an expletive ridden address at the Women’s March on Washington.