Kaloti Precious Metals-Morning Market Report-Wednesday, March 22, 2017

Market Daily & Weekly

Note: Indications only, open and closing prices are bids; Data source: Bloomberg; Times as per Dubai

Fundamentals and News

The Daily Prophet: This May Be the Day the Trump Trade Died

Maybe investors should forget the Trump trade and start prepping for the Trump correction. U.S. stocks had their worst day since October. The dollar can't seem to find a bottom. There's no rebound in sight for oil. Havens such as Treasuries and gold are back in vogue. There's an undeniable "risk off" vibe reverberating through markets.

The optimism that accompanied Donald Trump's U.S. election victory was built on a trinity of lower taxes, infrastructure spending and regulatory reform. Now, doubts are rising about any of those being realized, even with Republicans controlling the White House and Congress. The Obamacare replacement bill isstruggling to gain support from House conservatives and Senate Republicans, and some GOP lawmakers argue that a once-in-a-generation opportunity to overhaul the U.S. tax code with cuts for businesses and individuals depends on the outcome. Bank, industrial and technology shares -- some of the biggest beneficiaries of the Trump trade -- were the biggest losers.

It's a nerve-racking time for investors, who have pushed equity valuations to record highs. Nobel Prize-winning economist Robert Shiller recently said the last time he remembers equity investors being as bullish as they are now was in 2000, and that didn’t end well. "The amazing run the market has had since the election left no room for error, delay or issues of any kind,'' Peter Boockvar, chief market analyst at Lindsay Group, wrote today in a research note.

If markets truly believed that Trump's policies would juice the economy and spark faster inflation, then the dollar would be a prime beneficiary -- except the greenback is on an epic slump. The Bloomberg Dollar Spot Index has fallen for five straight days, the longest stretch of declines since the week before the election. The gauge dropped today to its lowest level since Nov. 10. Bank of America Corp. said based on what it sees in terms of market positioning, sentiment surveys conducted with its clients, and publicly available futures data, bullish dollar positions put on after the election have completely disappeared, according to Bloomberg News's Andrea Wong. What makes the recent weakness even more compelling is that it comes largely at the expense of gains in the euro, which is on a tear even as Europe faces its own political uncertainty with pending elections in France and Germany, as well as new debt troubles in Greece.

Data Forthcoming Releases

Courtesy: http://kalotipm.com.sg/kaloti-market-report-22nd-march-2017