MarketWatch reports the U.S. dollar traded in a small range against other currencies today, as “traders focused on new developments surrounding the Republican-led tax-cut legislation, which could be delayed.”
The uncertainty around the tax legislation has been “weighing on the dollar,” says MarketWatch. Konstantinos Anthis, a researcher for ADS Securities told the financial news site, “With Fed’s monetary policy and December rate hike almost fully priced in and after [Jerome] Powell’s nomination for the Fed Chair, the dollar has currently run out of positive catalysts. Moreover, given the reasonable time a new tax bill takes to be debated the greenback can’t expect any backing from that front either any time soon.”
News of the potential tax reform affected U.S. stocks, as they struggled to gain momentum today. Some strategists and traders believe that future gains may be withheld until a catalyst is created. Ian Winer, head of the equities division at Wedbush Securities, told MarketWatch he thinks now may be a hard time for investors to sell stocks. “There is no alternative to stocks, central banks are still largely accommodative and in lieu of any of that changing, it is hard to come up with a compelling bear case.”
Sectors: Among Sector Benchmark ETFs, the average momentum score has remained around 9.82 for the last two weeks. Energy has increased the most for the week, up 18 points. Telecom fell the most, down by 22. Telecom remained at the bottom, while cyclicals remained near the top, suggesting that the market has a continued appetite for risk. Telecom has been trending down due to a loss of subscribers. The spread between the highest and lowest increased from 60 to 86.
Factors: The leading Factor Benchmark ETFs decreased for the week, going from 17.4 to 16.73. High Beta was one of the few factors that increased, up 3 points. Small Size and Dividend Growth decreased the most, losing 6 and 4 points, respectively. Momentum and Growth led, while Dividend Growth and Yield remained at the bottom. Factor rankings continue to suggest a market appetite for risk. The spread between top-ranked and bottom-ranked securities increased slightly from 32 to 33.
Global: Among the leading Global Benchmark ETFs, the average score increased from 14 to 16 for the week. Japan increased from 29 to 34, while Latin America fell from -7 to -12. China, which increased from 24 to 34, is now in second place, followed by Emerging Markets. The Pacific, UK, and Latin America regions remained at the bottom of the rankings.
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