U.S. equities drifted lower on Monday amid relatively quiet trading as everyone continued to buzz about the historic Super Bowl result.
In the end, the Dow Jones Industrial Average lost 0.1%, the S&P 500 gave back 0.2%, the Nasdaq Composite fell 0.1% and the Russell 2000 lost 0.8%. Treasury bonds rallied, the dollar bounced, gold gained 0.9% and crude oil lost 1.5%.
The action was in precious metals, which surged higher on a safe haven bid thanks to election uncertainty in Europe as anti-establishment, populist candidates in the vain of President Donald Trump are poised for possible electoral upsets in Germany, France and Italy in the months to come.
Lagging poll numbers for German Chancellor Angela Merkel has pushed German sovereign risk measures to levels not seen since last year’s Brexit surprise.
In response, the SPDR Gold Trust (ETF) (NYSEARCA:GLD) has lifted out of a two-month trading range to hit levels not seen since the middle of November. Edge subscribers are taking advantage of the move via the Vectors Junior Gold Miners ETF (NYSEARCA:GDXJ), which is up nearly 8% today to bring its total gain to 9.3% since first recommended on Jan. 5.
Toymaker Hasbro, Inc. (NASDAQ:HAS) surged 14.1% after reporting a big fourth-quarter earnings beat with better-than-expected revenue across all business segments. Advanced Micro Devices, Inc. (NASDAQ:AMD) gained 11.4% on positive Barron’s coverage noting the stock could double over the next year thanks to GPU market share recapture and a new management team.
Energy stocks were the laggards, down 0.9%. Tiffany & Co. (NYSE:TIF) fell 2.5% after its CEO stepped down.
Stepping back, dark clouds have reappeared on the political front after a sunray late last week related to President Trump’s executive order to scale back some of the new regulations on Wall Street. There are doubts about the timing of tax reform efforts and an Obamacare replacement. And overseas, anti-globalist politicians are seeking to mimic Trump’s rise here at home by railing against uncontrolled immigration, supra-national bodies like the European Union and the United Nations and globalization in general.
There is even chatter about new problems in the Greek bailout deal as negotiations between Athens and its creditors have reached another impasse.
With stocks technically vulnerable and overbought, caution is warranted still.