What are the other markets telling us about stocks?
Bonds are moving lower on the fact of their safe haven status. French elections, potential Korean conflict and Middle Eastern tensions all have investors flocking Treasury notes.
Gold prices are above 200-day moving average and knocking on $1,300 an ounce. Energy prices have moved lower on the Trump Administration’s comment on the dollar being too strong.
So that puts equities in the crosshairs of investors. Selling off high-price stocks, which saw 25% rise after the election, appears to be a prudent move as I wrote when the tax-cut plan was shelved until this September at the earliest.
As tax day approaches Tuesday there may have been selling to pay off Uncle Sam for some capital gains realized at years end, since no one knew how the markets would react to a Trump presidency.
So going forward, look for stocks to trend lower in the next month or so. I still believe we will not get a rate hike at the next meeting, given the jobs number at the first look at Q12017 GDP outlook. Surely the Fed will have a good reading on that for the meeting.