Oops, where did that come from?
Wall Street suffered its biggest one day drop in five months overnight as investor confidence in the Trump presidency and the future direction of the American interest rates hit bank stocks particularly hard.
In fact the Dow and the S&P 500 saw a 110 day streak without a 1% fall come to an end.
The Dow closed down 237 points, or 1.2%, at 20,668 on early Wednesday, Sydney time while the S&P 500 index lost 1.2% to end at 2,344.
The two main market measures hadn’t finished with a decline of 1% or more for a history-setting 110 trading days.
Financials were among the worst performers, cutting 62 points from the Dow and dragging financials broadly lower.
Our market will start with a 47 point slide on the overnight futures market while the Aussie dollar dipped under 77 US cents (to trade around 76.90 in early Asian dealings). the Aussie’s fall came despite the greenback hitting a six week low against its major trading peers.
Having dropped by more than 1%, it would not surprise if the market revisits this zone in the next few weeks until there’s more clarity on the Trump Presidency and some of its key policies, and the future direction of US rates.
The US yield curve flattened noticeably overnight which is bad news for the profitability of lending by financial stocks, especially banks.
