Market Action

• The Dow crossed the illustrious 20,000 level this week, setting new highs in the process. Cyclical sectors dominated the markets, revitalizing bullish optimism.
• President Trump officially removed the U.S. from the Trans-Pacific Partnership this week and has floated the idea of a 20% border tax on imports to help finance a barrier between the U.S. and Mexico.
• China pumped over $160 billion into money market funds this week, in anticipation of the new year. It’s a record injection for China as bond yields reach their highest level since 2015.
• Q4 GDP came in slightly below expectations at 1.9% GDP per data on Friday. The rate was dragged down by a larger than expected trade deficit and prevented growth from reaching 3% for the year.
• Japan exports have risen more than expected in recent months thanks to the weaker Yen but inflation remains muted. The central bank increased the size of its bond purchase program this week.
• European bond investors sold more bonds than they bought towards the end of 2016, the first time in four years that they were net sellers. The rise in U.S. yields is one explanation for the trend, as European yields remain far below those in the U.S.
• The U.S. rig count rose for the second straight week thanks to higher prices. Energy firms are planning increases in capital expenditures by an average of 60% for 2017.

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