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Global Stocks Hit 21 Month Highs, Futures Point To New Record Ahead Of Inflation Data

The global "risk on" melt-up continues. After a modestly hawkish Yellen warned that every meeting is live, and refused to take March off the table, sending the dollar and yield higher and the S&P to fresh record highs, world stocks rose hitting a 21-month high on Wednesday with the dollar rising for the 11th straight day, the longest positive streak since July 2015.

Key Events In The Coming Humphrey-Hawkish Week

The key economic releases this week are CPI, retail sales, and industrial production on Wednesday. In addition, there are several scheduled speaking engagements from Fed officials this week, including Chair Yellen’s semi-annual Monetary Policy Report to Congress on Tuesday and Wednesday (Humphrey-Hawkins).

Global Stocks Rise, S&P Futures Make New Record Highs As "Trump Trade" Euphoria Returns

European and Asian stocks, S&P futures, bond yields, the dollar and commodity metals are rose, in some cases making new all time highs, lifted by the latest reemergence of the "Trump trades" as hopeful investors once again bet that the U.S. president's tax reform plans will boost economic growth and corporate profits, despite another warning from Goldman that the president's fiscal plan is about to be derailed.

The Honeymoon Is Over: Goldman Slams Trump's Economic Plan, No Longer Expects A Border Tax

"One month into the year, the balance of risks is somewhat less positive for three reasons. First, the difficulty congressional Republicans have had in moving forward on Obamacare; Second, while bipartisan cooperation looked possible following the election, the political environment appears to be as polarized as ever; Third, some of the recent actions by the Trump Administration could be disruptive for financial markets and the real economy." - Goldman Sachs

Goldman: "All Our Clients Are Confused And Unsettled"

'"Unsettled” is our best description of fund managers’ mindset as the new administration takes office. During an extensive series of client meetings in the US, Europe and Asia, it became apparent that investors are confused about how to best position portfolios under a Trump presidency.'

The US Economy: Back On Track?

The weekly rail traffic report published by the Association of American Railroads provides a great snapshot of US economic activity almost in real (weekly) time. Last July we noted that we were starting to witness some signals of a trend change, now suggesting a softening. But much has happened since then, including a broadly unexpected change in the political direction of the US. Have those signals been reversed as a result?

Just 3 Things

Importantly, with economic growth anemic, consumers stretched and an economy heading into one of the longest post-recessionary expansions on record, there is little room for a policy misstep at this juncture. Maybe Trump will be wildly successful and the economy will come roaring back. That is a possibility. But there is also the risk it won’t. Optimism is one thing. Your personal capital and financial health is quite another.

Key Events In The Coming Week: All Eyes On Trump

The main economic release this week is US retail sales, ECB minutes and a series of Chinese economic releases. There are several scheduled speaking engagements from Fed officials this week, including a webcast address by Chair Yellen on Thursday. However, the highlight of the upcoming first full week of 2017 might well be President-elect Trump's first news conference on Wednesday since his election win.

Party Like The Dow Is 19,999: US Futures Dip As Global Currencies Stumble; Oil Down, Gold Up

European, Asian stocks fall and U.S. equity-index futures traded mixed on Monday with fresh memories of the Dow Jones rising to under 1 point of 20,000 on Friday. The dollar has rebounded on fresh geopolitical concerns, while the pound extends its decline from Friday and has slide to 10 week lows on a Sunday interview from Theresa May which suggested a "Hard Brexit" may be in the cards.