Trump Pivots, Consumer Confidence Surges, Stocks Rally Halting an Eight Day Selloff

US equities broke an eight-day losing streak in reaction to positive economic data and an uptick in consumer confidence. The most recent data suggests that Consumer Confidence Index is at its highest level since 2000. The Index gained 9 ½ points in March and is currently at 125.8, which is a 27-year high.

This consumer confidence has been steadily growing since Donald Trump was elected president. Although President Trump’s approval rating has dropped to a new low of 36%, his agenda for lower taxes, better trade agreements, and infrastructure spending has helped boost consumer confidence to a record level.

A week of declining stock prices had market participants questioning whether this administration can implement campaign promises after failing to bring his healthcare legislation to a vote. However, US equities staged a massive comeback with the Dow closing up approximately 160 points (.77 %), resulting in the Dow Jones industrial average closing above 20,700.

Trump Pivots

President Trump has quickly pivoted away from repealing the Affordable Care Act and is focusing on tax and regulatory reform. After a stinging defeat and withdrawal of the Republican health care bill, this administration has begun to set the groundwork for the major tax reform that was central to his campaign promises. Trump's approval rating is two percent below President Obama’s lowest rating and below the all-time low of President Clinton, but he is still able to fuel robust consumer confidence. Per CNBC, and based on today’s data, consumers who saw jobs as “plentiful” rose to 31.7% from 26.9% in February.

Gold Unable to Overcome US Dollar Strength

Although trading off today’s lows, gold prices continue to trade under pressure. Spot gold prices are currently fixed at $1250.40 which is a decline of $3.40. A closer look at pricing, based upon the Kitco gold index, reveals that gold traders bid up the precious yellow metal by $2.60. It was a strong US dollar that amounted to a six-dollar decline in gold pricing, resulting in a net loss on the day of $3.40 per ounce.

Wishing you as always, good trading,

Gary Wagner