Welcome back and hope everyone had a wonderful weekend,
Predictions of an inauguration day sell-off were wide of the market after the S&P 500 added 7.6 points or 0.3 per cent to 2,271.31 and the Dow Jones Industrial Average 94.8 points or 0.5 per cent to 19,827.25, though shares pared their gains upon the delivery of the president's address
Just under way, fourth-quarter earnings reporting season is providing a glimpse of what major large companies expect under Trump, and their take is largely positive so far. Over a dozen S&P 500 companies reporting results in the last week have signaled optimism about potential tax cuts, infrastructure spending, employee benefit costs and reduced regulation. With corporate earnings already on the mend after a slump in oil prices and a strong dollar last year, S&P 500 companies are expected on average to grow their earnings by 6.3 percent in the December quarter and 13.6 percent in the March quarter, according to Thomson Reuters I/B/E/S.
Since the November election, the S&P 500 has rallied 6 percent to record highs, in part due to expectations Trump will pass policies that stimulate the economy. Banks have led gains, with investors betting Trump will roll back regulations passed by President Barack Obama following the 2008 financial crisis, which many investors say went too far.
Looking ahead, the Australian economic calendar awaits Wednesday's fourth-quarter inflation number where the median forecast is for a 0.7 per cent rise in the consumer price index. However, that alone won't be enough to restore inflation to the Reserve Bank of Australia's target band.
