The Dow hits new record high on hopes for Trump's policies

Dow jumped up 132, decliners over advnacers 4-3 & NAZ gave back a large 67.  The MLP index rose 2+ to the 298s & the REIT index sank 5+ to the 319s (down 50 from record highs this year).  Junk bond funds saw more selling & Treasuries slid back slightly with the yield on the 10 year Treasury at 2.07%.  Oil dropped (more below) & gold was a bit lower.

AMJ (Alerian MLP Index tracking fund)

CL=F

Light Sweet Crude Oil Futures,J

45.39

-0.55

-1.2%

GC=F

Gold Futures,Dec-2016

1,265.50

-8.00

-0.6%

Start Using the Leverage of Options and the Power of MarketClub Today!

Four Days, Four Trades, +40% Average Returns
Learn to trade options with MarketClub!

Filings for unemployment benefits declined from an almost 3-month high ahead of the presidential election, indicating the job market remains competitive for employers.  Jobless claims fell 11K to 254K, according to the  Labor Dept.  The forecast called for 260K.  Continuing claims rose, though the 4-week average dropped to the lowest since 2000.  Steady progress in the in the labor market has kept layoffs near a 4-decade low, as managers resist dismissals in face of a shrinking pool of qualified applicants.  The figures come on the heels of last week’s monthly jobs report showing employers continued to add to payrolls at a steady pace in Oct.

Filings for unemployment benefits have been below 300K for 88 straight weeks, the longest streak since 1970, & a level typical for a healthy labor market.  The 4-week average of claims ticked up to 259K from 258K.  The number continuing to receive jobless benefits rose 18K to 2.04M while the 4-week average dropped by 2K.  The unemployment rate among people eligible for benefits held at 1.5%.

• Jobless Claims in U.S. Declined Ahead of Presidential Election 

Oil fell as the market's focus shifted from the shock of the presidential election victory to questions about OPEC’s ability to rebalance crude supply & demand.  Crude futures declined almost 2%, erasing earlier gains after the International Energy Agency said prices may retreat amid "relentless global supply growth" unless OPEC enacts significant output cuts.  The $ rose to an 8-month high, putting downward pressure on commodities priced in the currency.

Traders are weighing the implications of a Republican again presiding over the nation that consumes more oil than any other, & is one of the biggest producers.  Trump has promised independence from OPEC & some of his energy policies include opening federal lands for energy production & freeing up offshore areas to development.  While investors took comfort from a conciliatory acceptance speech yesterday, a surge in US crude supplies served as a reminder of the massive global glut, which the IEA said could persist through 2017.  West Texas Intermediate for Dec delivery fell 71¢ (1.6%) to $44.56 a barrel.  Prices closed up 0.6% yesterday, partially erasing an earlier 4.3% slide as Trump's pledge to unite divided political factions prompted a reversal in the knee-jerk sell-off. 

• Oil Falls as Focus Returns to OPEC After Trump Election Surprise

German politicians expressed concern that a wave of populism that led to Trump's election & the UK vote to leave the EU will result in a roll back of free trade that will harm the global economy.  While policymakers in Europe should “wait and see” what Trump actually does once in office, there are concerns in Germany that the US election outcome could be a setback for free trade.  With exports rising to $335.B, Germany was the 3rd-biggest seller of goods among Group of 20 nations in Q2.  That compares with US exports of $358B & Chinese exports of $536B, according to Organization for Economic Co-Operation & Development.  “Demagogic populism is not just a problem in America,” German Finance Minister Wolfgang Schaeuble said.  “Also elsewhere in the West, the political debates are in a worrying state.”  Merkel’s party has suffered a series of regional election defeats on the back of her open-door refugee policy, criticized by the anti-immigration Alternative for Germany party, which is in 3rd place nationally in polls.

German Politicians Say Populism May Harm Trade, Global Economy

This is a confusing day for stocks.  30 Dow stocks are at a new record while the rest of the market is seeing selling.  Yield securities have been out for favor for some time.  Treasuries are being sold.  REITs & junk bonds are losing fans on fears of higher interest rates.  As stated yesterday, price swings in stocks mean little with all the confusion over the presidential election & what that will bring.  Old rules are being discarded.

Dow Jones Industrials