Gold and Stocks Fall Ahead of the President’s Speech

Gary Wagner

 Tuesday February 28, 2017 17:14

In just a few hours, newly elected President Donald Trump will speak to Congress for the first time. With just over a month into his newly elected office, the president will deliver his first major speech detailing his agenda and game plan to convert his campaign promises into policy. In anticipation of Trump’s first major address to Congress, the financial markets are in a holding pattern, with equities trading modestly lower, as traders and investors cautiously await tonight’s speech.

Safe haven assets are trading under modest pressure, with gold currently trading $3.00 lower at 1249. Even with the most recent price declines in gold, the precious yellow metal has traded to higher ground for the second consecutive month as February trading comes to a close.

Thirteen is an Unlucky Number for US Equities

US equities have traded to new record highs for the last 12 consecutive trading days. This matches the record for consecutive closes resulting in a new record high. Thirteen consecutive closes would have broken that record, but it seems 13 is also an unlucky number for the equities.

The Art of The Deal

The self-proclaimed dealmaker will have his first opportunity to layout his vision as to how he will bring to fruition the sweeping changes he has promised. This will be his first attempt at the give-and-take, the checks and balances and the compromises and concessions that will be necessary to sell and implement his vision to a deeply divided house.

Citizens, investors and Congressional leaders will listen closely for the details of his plan in regards to tax reform, regulatory reform, healthcare, infrastructure projects and defense spending. Hopefully President Trump’s address tonight will be substantive and substantial, revealing the components and structure of his game plan, and offering clarity rather than grandiose statements, and a comprehensive detailed plan to execute his vision.

If the President is able to effectively communicate details of his policy agenda, and if the details of this agenda are grounded, realistic and based on facts, we could see a dramatic continuation of the incredible stock market rally. However, if Trump fails to offer the nuts and bolts of his game plan, we could see US equities trade dramatically lower and safe haven assets such as gold spike to dramatically higher pricing.