2017 was never going to be boring

The rhetoric of Donald Trump via Twitter and news outlets has now become very real now that Obama has given his farewell speech.

Source: Bloomberg

In his first press conference, Trump spent some of his time defending himself against ‘nonsense’ intelligence reports and stated he would not divest himself of his business holdings. He also reaffirmed a border tax on US companies that would shift production overseas. This caused the stocks of auto makers to have a mixed reaction in US trading, Ford Motor Company fell 2% while General Motors rallied 1.1%.

Trump openly criticised the pharmaceutical and biotech sectors, sending the healthcare index down 2.6% in early trade and putting a lid on recent gains in the Nasdaq. Traders had been expecting the President-elect to be good for the industry, with many stocks making strong gains since November. The coming reporting season only days away will provide many companies an opportunity to state not only their trading results but also commentary around future business. At risk is the Pacific trade pact involving Australia and a trade war around protectionism.

Healthcare in Australia has been one of the better-performing sectors, up 2.6% in the new year.
Companies like Mayne Pharma with a portfolio of generic drugs recently purchased from Teva/Allergran is one Australian company with a strong US exposure that will be closely watched in the coming months.

The USD index fell back to 101.55 which saw other currencies move higher. The AUD/USD made a strong move to 0.7450, which will provide some pressure to the Australian session today. USD/JPY traded in the 115 range overnight and may bring some pressure onto the Nikkei in today’s trade.

For the Aussie market, the SPI futures show a ten-point gain. Closely monitored today will be Bellamy’s after yesterday surprising the market coming out of suspension two days early and falling a further $2.00 to open at $3.84. This is a dramatic fall from grace as the stock had traded over $12 mid-2016. 

BHP’s ADR is 1.1% matching at $26.31, and higher on a stronger iron ore price.
We are expecting a strong open in resources with across-the-board gains in metals and a mainly flat overnight oil settlement at $52.75 a barrel.

Goldshines again in Australian resources after making good gains overnight. Gold price remains above $1600/oz. With the USD gold making highs of $1198.36/oz,  the gold resource sector looks well supported for today’s trade.

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