Markets see the other side of the Trump coin as new round of executive orders spell uncertainty and spark social unrest

Over the weekend, President Donald Trump signed another series of executive orders which were again met with massive, nation-wide shows of protest. The most controversial was a chaos-inducing broad ban on immigration from a selection of Muslim-majority countries. The ban group included Iraq, Iran and Syria, and was couched in the interest of national security. Widespread protests at major airports across the country, along with an ACLU lawsuit, concluded the episode with emergency action by a federal judge to temporarily reverse the ban. Airport operators have criticized the ordeal as poorly planned and frustrating, leaving many employees and officials confused about how to carry out the executive action.

The points at which social unrest will have real market impacts is being previewed. Infrastructure projects, fiscal policies and deregulation were some of the driving forces behind the previous Trump rally, but the current political realities are impossible to ignore. Restored economic strength will prove difficult to achieve with consistent and growing social strife. As an example, global tech giants based in the U.S depend on bringing in talent from abroad. This travel ban directly impedes that process and may force smaller tech companies to move jobs out of the U.S, which would be the antithesis to Trump’s campaign rhetoric. Apart from domestic disapproval, President Trump is facing high degrees of public scrutiny around the world. In the UK, protests are underway and a petition to cancel a state visit from Trump has already gained more than one million signatures.

Many investors and analysts are looking at a decidedly rough first year for this administration. Uncertainty will likely start to replace euphoria and Trump’s policy prescriptions may be hard fought with political resistance. By starting the year off this way, the prospects of bipartisan cooperation is increasingly bleak.  

The Dow has dropped below its recent history-making 20,000 level. The index is currently down 170.94 points, or 0.85%, at 19922.97. The Nasdaq-100, a tech-saturated index, is down 1.12% at 5597.91.  The S&P 500 is currently trading at 2273.92 which is down 0.91%, or 20.97 points, from the open.

Using the ^GSPC symbol to analyze the S&P 500, our 10-day prediction window shows slight upward corrections after today’s slide. Consistent positive vector figures hold around 0.50% with slight oscillations.  The predicted close today is 2291.84, with predicted support and resistance at 2289.86 (± 3.02) and 2314.84 (± 3.06), respectively.  

Upcoming Events and Reports

A two-day FOMC meeting will begin this Tuesday, with most expecting interest rates to be left alone.

Major earnings reports are due this week, the majority from components of the S&P 500 as well as five from the Dow. Tuesday will see reports from Apple, Facebook reports on Wednesday, and Amazon will report Thursday.

Protests continue over President Trump’s controversial travel ban, including leadership from the business community and GOP party leaders. Executives from Facebook, Alphabet, Netflix, Microsoft and a slew of other companies are dealing harsh criticism of the ban. John McCain and Lindsey Graham have led opposition from the Republican Party.  

Oil

Crude oil futures are continuing choppy trading as markets evaluate the significant rise in U.S rig count- which could offset the OPEC-led global production drawdown. The U.S. Energy Information Administration reports that domestic oil production levels are currently at 8.96 million barrels per day- a figure that is expected to rise. Currently, crude oil futures are down 0.68% from the open at $52.81.

Looking at USO, a crude oil tracker, our 10-day prediction model shows a potential recovery at an incremental pace. Positive vector figures climb toward 2% within the next 10 days with slight oscillations, relative to today’s conditions. The fund is currently trading at 11.31, down 0.79%. Today’s prediction sees support at 11.39 (± 0.05) and resistance at 11.48 (± 0.05). The predicted close for today is 11.45.  

Gold

Due to the current market turbulence, investors are looking to perceived safe havens including Gold and the Japanese yen. Gold futures are currently up 0.55% today at $1197.50 a troy ounce. Going forward, it will be interesting to watch safe-haven assets following any controversial or disruptive executive action from the Trump administration.  

Using SPDR GOLD TRUST (GLD) as a tracker in our Stock Forecast Tool, the 10-day prediction window shows signs of a sell-off. Negative vector figures climb from under 1% toward 5% within the next 10 days, relative to today’s conditions.  The gold proxy is currently trading at 113.96, up 0.41%. Today’s predicted low is 111.79 (± 0.22) and the predicted high is 113.49 (± 0.22). The predicted close today is 112.47.  

Treasuries

Yields are slipping today and bond prices are edging up amidsts market uncertainty- fueled by the first weeks of the Trump presidency being mired in confusion and controversy.  Using the iShares 20+ Year Treasury Bond ETF (TLT) in our Stock Forecast Tool, we see the bond market sustaining volatility. Negative vector figures reach toward 3% at the end of the 10-day window, relative to today’s conditions.  

TLT, an ETF which tracks 20+ year bond returns, is currently priced at $119.575, which is up 0.05% from the open. The predicted close today is 118.89 with a low and high of 118.36 (± 0.20) and 119.63 (± 0.20), respectively.  

Volatility

The CBOE Volatility Index (VIX) has shot up 18% today to 12.48.  The 10-day prediction window shows fluctuations which is understandable considering the current condition of uncertainty. A mixed outlook sees magnitudes of change ranging from 1-4% in both directions, relative to today’s conditions.  The predicted close today is 10.94. Today’s predicted lows and highs are 10.55 (± 0.16) and 11.15 (± 0.17), respectively.

Other news

Delta Air Lines Inc. (DAL) saw its shares slip after a computer glitch resulted in widespread cancellations over the weekend. Its stock price is currently down 3.96% from the open.

Latest economic data shows that consumer spending rose 0.5% last month- the biggest December spending increase since 2009. Inflation factored into some of these spending figures, however.