Picks of the Day
After closing down two days ago, Wall Street corrected yesterday and traded up. On Wednesday, Fed members confirmed the market’s projections, announcing that it was hiking rates. It seems that the stock market rally still has room to grow and that the market won’t be derailed from its current rally because of the hike. All eyes are now on the 20,000 point level on the Dow, the bulls again in control. In summary for the day, the S&P 500 tacked on 0.4%, the Dow rising and ending just 60 points short of the 20,000 point level.
Two days ago Fed Chairwoman, Janet Yellen, took the helm, announcing the central bank decision to hike rates by 0.25%. In an official announcement, the Fed relayed that it forecasted further job market strengthening this coming year, and seeing that inflationary pressures aren’t expected, it deems it proper to increase the clip of rate hikes to three for 2017.
Yellen explained two days ago that the effective rate hike pace will be contingent – among other things – on the implementation of Trump’s policy in two central regards, tax reductions and the enlargement of the federal budget. The more Trump succeeds in bringing his plans to greater fruition, rates will be hiked. More sweeping investment in infrastructure and tax cuts are likely to lead to more hires, putting upward pressure on real wages, something that will certainly prop up inflation. The Fed linking its moves to Trump policy will certainly play out as a positive counterweight to executive decision.
The president-elect, Donald Trump, has done little more than twitting whatever comes to mind, which has led the Fed to proclaim that it will hike rates yet again this year, three times as opposed to the prior anticipated two for a cumulative jump of 0.75%. The Fed plans, and not in small measure, to check Trump’s intended fiscal expansion.
Friday: Dramatic trading this past week that featured the second rate hike in a decade will come to a more pacific close today, indexes positioned at all-time highs with the market with little to expect on the economic front with nothing but housing starts at 8:30 N.Y. time.
Right in time, before the holiday season, Trivago (TRVG) will make its Wall Street debut with one of the most interesting issues of recent memory. The company, known for its slogan, “Never pay full price on hotels,” will look for Wall Street to put its money where its mouth is and right now, Wall Street’s all on board. Full attention has been given to this recent IPO with the travel sector red-hot, reflected in a 22% jump in the stock price of Priceline (PCLN). Priceline is now responsible for 43% of the revenues of Trivago. Priceline itself has gone a very long way since going public in March 1999, at the height of the dot.com bubble. The stock was then priced at $16 per share, closing already at $69 on its first trading day. Fast forward to the end of 2016 and lo and behold, Priceline closed yesterday’s trading at $1,528.
Trivago (TRVG), headquartered in Düsseldorf, Germany, is the owner of an internet platform for booking hotels worldwide. The company’s mission is “to be the traveler’s first and independent source of information for finding the ideal hotel at the lowest rate.” The company is expected to raise close to $400 million.
Friday’s Hot Stocks: ORCL, AGIO, ADBE, GILD, JBL,
Have a great trading day!