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Midday Market Update

Investors Await Trump Conference


U.S. Markets
U.S. stocks were higher ahead of the President-elect’s press conference. Dow and S&P were up 0.46% and 0.16%, respectively. Nasdaq showed no signs of stopping and had gained 0.10% before noon. Investors are mostly on the sidelines, looking forward to what Donald Trump has to say. If the press conference doesn’t make things clearer for the market, the stock rally could continue further to his inauguration next Friday. It will be interesting to see if many investors take profits as he takes office because they feel that it will be difficult for him to meet the high economic growth expectations that have been created. After all, there is an old saying that goes, “Buy the rumor and sell the fact.”

Gold was trading for $1,179.40 per ounce, down 0.53%. World Gold Council data shows that gold prices have been on a slide ever since gold hit its peak in mid-2011. However, the average annual return on gold, in USD terms, has consistently outperformed the average returns on U.S. Treasuries, Japanese government bonds, eurobonds, and U.K. gilts over 10-year, five-year, and one-year time horizons since 1997. Operating in large markets that rival those of major sovereign bonds, gold is one of the most highly traded financial assets, with low transactional costs and universal acceptance. Although it is not necessarily a good hedge against inflation, gold helps preserve capital and diversify portfolios, and it serves as a valuable collateral.

Manjul Bhusal Sharma does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.