Well, that was fun while it lasted. After nearly four months of straight gains on the major indexes, traders decided to finally take a breather this week. Political uncertainty came to a head as promised policies by the Trump administration ran into the quagmire that is Washington. A lot of these promises have been baked into the markets since Trump’s election, and with several key talking points – such as the repeal of Obamacare – meeting opposition, traders overwhelmingly sold stocks on the week. Turning the Trump Bump into the ‘Trump Slump.’
Not helping was the sheer lack of data. While the previous week’s data deluge painted a bullish picture, this week’s lack of metrics left traders solely focusing on politics. And what was released was less than bullish. Adding these data points to the bearish political situation helped to drive equities downward.
Also assisting in the sell-off was the lack of positive earnings reports. The so-called earnings season is nearly over and only a handful of bellwethers reported this week. Nothing they announced was good. Several high-profile profit and revenue misses were recorded.
In the end, all of these factors helped to turn the mood on Wall Street decidedly bearish.
Check out last week’s Market Wrap here.