Tuesday saw little change in the American stock market. Reason? Investors have decided to play it safe before the first-quarter revenue season. There is also much worry about whether or not Trump will be able to live up to his tax reform and related promises.
Another thing that stopped investors from taking any major decisions was the potentially serious meeting between Xi Jinping, Chinese President and Trump, which is scheduled to take place end of this week.
There was significant drop in retail stocks post downgrading. Simultaneously, Ralph Lauren announced that the famous Fifth Avenue store was being shut down in an attempt to cut jobs. An equity research analyst from Fort Pitt Capital Group (Pittsburgh) was reported saying that they were choosing to remain on the sidelines and wait for revenues to kick in next week.
Investors unsure about Trump’s promises
The promises stated in the pro-business policy of President Trump have helped American equities in hitting record highs. However, there have been quite a few setbacks in the recent times with the consistent push of reforms via Congress. Investors are now skeptical of his delivery claims.
Despite good earnings, there is a possibility of stocks being overhauled without significant tax cuts that are already taken into account by the market.
Investors will be closely watching the meeting between the two presidents, especially with regards to new on China-U.S trade relations. This means that stocks are unlikely to witness any significant changes till Friday. The current scenario is hugely dependent on politics.
Here are some of the changes in major stocks in the last few days:
- The Dow Jones Industrial Average reported an increase of 39.03 points and now stands at 20,689.24
- There was 3.93 point increase in the Nasdaq Composite
- The S&P rose by 1.32 points and stands at 2,360.16
There was 0.2 percent increase in the S&P industrial sector. At the same time, the materials sector was up by 0.4 percent. But financial investors weren’t too convinced since there was 0.3 percent drop in the S&P bank sub-sector.
The Airlines sector was also weak. American Airlines reported a drop of 3.7 percent ($40.90) and its key competitor Delta Airlines reported a drop of 2.6 percent ($45.11)
In comparison to the daily average of 6.8 billion shares exchanging hands on American stock exchanges, only 6.2 billion were exchanges in the last twenty trading days.