Stocks Rebound in Wake of Trump Volatility

U.S. equities suffered another bout of volatility on Wednesday after intense fireworks were seen at President-elect Donald Trump’s first press conference in months. Issues such as Russian hacking of the Democratic National Committee, a “fake news” report from BuzzFeed and more were discussed.

In the end, the Dow Jones Industrial Average gained 0.5%, the S&P 500 gained 0.3%, the Nasdaq Composite added 0.2% and the Russell 2000 gained 0.2%. Treasury bonds were stronger, the dollar was hit hard in the wake of Trump’s comments (disappointment at the lack of stimulus discussion) after trading higher earlier in the session, gold gained 0.9% and oil gained despite a larger-than-expected U.S. inventory build.


Energy stocks led the way on the oil bounce, climbing 1.2%. Utilities gained 1% on yield relief from the strength in bonds. Healthcare stocks were the laggards, down 1%, after Trump criticized drug pricing and the lack of a bidding process as part of the Medicare drug benefit. Specifically, he said the industry was “getting away with murder” and had too much power over policy setting in Washington, D.C.

Continuing the strength seen in automakers and auto supply chain stocks, American Axle & Manufact. Holdings, Inc. (NYSE:AXL) gained 3.4% after raising 2017 sales and margin guidance ahead of expectations. Rite Aid Corporation (NYSE:RAD) rose 3.4% after the NY Post reported that federal regulators are looking to complete the proposed merger with Walgreens  Boots Alliance Inc (NASDAQ:WBA) soon. And drug maker Merck & Co, Inc. (NYSE:MRK) shrugged off the weakness in its sector to rise 2.9% thanks to the announcement of a FDA priority review for an advanced lung cancer treatment.

Supervalu Inc. (NYSE:SVU) fell 7.5% after missing fiscal third-quarter operating earnings expectations by barely 30% on weakness in its wholesale grocery business.

Technically, the Dow remains parked just below the 20,000  level as breadth continues to deteriorate and evidence of buying activity in safe haven assets — Treasury bonds and gold — rises. Edge subscribers enjoyed another 1.9% gain in their ProShares Ultra 20+Year Tsury ETF (NYSEARCA:UBT) position.

Anthony Mirhaydari is founder of the Edge and Edge Pro investment advisory newsletters. A two-week and four-week free trial offer has been extended to InvestorPlace readers.

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