Largely devoid of economic data releases, the four-day week, shortened by Martin Luther King Jr. Day on Monday, was devoted to speculating on how Trump and his economic policies would pan out over the coming months and years. The decision was largely a positive one, the major indices posting sizable gains Tuesday through Thursday.
As of Thursday's close, the Dow was up some 1,077 points on the week, the NASDAQ ahead by 423, and the S&P broke through to a new record close, up by 122 points over the three-day span.
Stock market gains the past two weeks broke out of a downtrend that began in December. All of the majors are up on the year, putting a positive spin on future developments, though it's still too early to call the movement a long-term trend. It appears likely that stocks will continue to bound higher despite lofty valuations. The major U.S. stock indices have been in rally mode since late October of 2023, an uptrend that's been in place for more than 14 months.
Unless there's some dramatic shift or world-altering event occurring on Friday, stocks are poised to close out the week giddy over prospects for the U.S. economy.
In a 46-minute presentation Thursday, U.S. President Donald Trump addressed an audience at the World Economic Forum (WEF) and fielded a number of questions from selected panelists.
The tone was extremely cordial, as opposed to the damning, vitriolic rhetoric used to describe Mr. Trump prior to his re-election as president. Apparently, now that Trump has control over the reigns of power, everybody wants to be his friend. It's actually a welcome change, but also somewhat sickening to see the groveling by Euro-centrist promoters who just months ago were pushing climate change, gay and transsexual lifestyles and comparing Trump to Hitler.
What's happened since Trump won the election in November and officially took office on Monday, January 20, is a superficial softening of tones, a rush by elites, billionaires, and leaders of nations to align themselves with the president in hopes that some of his irresistible charisma will rub off on them. It's superficial and disingenuous at best because these same people have been proven over the years to be largely untrustworthy promoters of their own twisted, destructive agendas.
One sees the heads of Google, Amazon, Apple, and Facebook all in attendance at Trump's inauguration. Are people supposed to just forget that these same folks used every technology available to smear, , mislabel, censor, and deride President Trump from the time he began his first campaign in 2015 until he won re-election last year, a decade of underhanded, deceitful, and one may say deplorable misdeeds and dirty politics?
All of a sudden, they're all playing nice. It would be foolish to trust them to do what's right, having done wrong so often, so completely, and so consistently in the past. As with the oligarch class of technocrats, so too the leadership of the EU and most of its nations. It's possible Trump trusts Russia's Vladimir Putin and China's Xi Jinping more completely than he does the likes of Ursula von der Leyen, Emmanuel Macron, or Justin Trudeau.
The unfinished business in Ukraine still needs to be addressed. Trump has intimated that prospects for peace are firmly in Putin's hands, though there's been little to suggest that a ceasefire or peace negotiations are imminent. Russian forces continue to press forward toward the Dnieper river south of Kiev. Control of the Dnieper is paramount as it is the major artery running north to south through the entirety of Ukraine as well as a physical demarkation separating Eastern and Western Ukraine.
Commerce and transit on and around the Dnieper are vital to Ukraine's economy. Russia's intention to control the river and cities adjacent to it is a defining factor in any kind of negotiated settlement to the conflict now approaching three years. Trump has expressed a desire to see the conflict come to an end, but it is a complex matter that will require all sides to make concessions, though Russia holds what amounts to a winning hand.
How the situation in Ukraine is eventually resolved will have long-term effects on world politics for years to come. Leaders in Europe and the UK still have not conceded defeat to the Russians, though it is obvious that they have an upper hand from a military perspective. As events unfold, it's very likely that the desires of European and UK leaders will be swept aside by a peace negotiated between Russia and the United States, mostly on Russian terms.
Trump, a hardened negotiator with decades of experience, knows his position is weak and may possibly concede to Russian demands in order to end the conflict and begin to heal relations between the U.S. and Russia without any input from NATO allies.
With U.S. markets set to open within an hour, Dow futures are down 107 points. NASDAQ and S&P futures are essentially flat. Precious metals bounced higher late Thursday into Friday, with gold reaching within $12 of its all-time high at $2,788. Silver is making up for lost time, currently testing $31.50. The high for the week in silver was $31.68 on Wednesday, so it appears that silver, should it follow gold's move, may end the week at what would amount to the strongest weekend close in more than two months.
Crude oil continues to stubbornly resist tendencies to price lower. After last Friday's close at $77.39, WTI crude dropped to as low as $74.20 late Thursday, but has rebounded Friday morning to just above $75.00. There's good reason to believe that Trump's directive to "drill, baby, drill" will eventually result in lower prices for crude oil, and all refined products, including jet fuels, unleaded gas at the pump, and diesel.
It's been an eventful week, but the lasting effects of new policies and programs coming out of the White House will need time to develop and be digested.
At the Close, Thursday, January 23, 2025:
Dow: 44,565.07, +408.34 (+0.92%)
NASDAQ: 20,053.68, +44.34 (+0.22%)
S&P 500: 6,118.71, +32.34 (+0.53%)
NYSE Composite: 19,978.78, +151.16 (+0.76%)
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