Stocks traded in mixed fashion ahead of Friday’s inauguration before a late selloff sent the Dow down 72 points on heavier volume to close at 19,732. The Dow Transportation Index moved higher led by rail stocks. Most gurus say the markets are in a holding pattern as investors are looking to see what policy initiatives will come from the new administration.
In economic news, weekly jobless claims dropped to 234,000, around their lowest levels in four decades. Housing starts spiked 11.3% in December, beating estimates and the Philadelphia Federal Reserve business conditions index rose to 23.6, above a consensus estimate of 15.8. This is all good stuff.
WTI crude prices have flattened out and are trading in a range of $51 on the low end and $54 on the high end. The IEA or International Energy Agency said today that US shale oil productivity has increased dramatically thanks to improved techniques and thus feel that US producers could begin to fill the void left by the OPEC production cuts. WTI crude ended the day at $51.41 per barrel off about 30 cents.
Fed Chair Janet Yellen yesterday gave a speech and in it, she expressed a more hawkish view of inflation and rising interest rates than had been expected. The effect was to push bonds lower as well as gold while the US dollar rose against most major currencies.