US Market Optimism Gets Back on Track after Comey Testimony
Comey’s testimony not enough to rock markets
Former US FBI Director James Comey’s testimony to a US Senate special committee on Thursday, June 8, proved to have a minimal impact on US financial markets—despite Comey’s accusations about President Donald Trump’s questionable honesty and interactions with him.
Investors had been worried that Comey’s testimony would reveal more evidence pointing to the Trump administration’s collusion with Russia in the 2016 US elections. But as it turned out, the fired FBI director revealed little new information about Trump’s relations with Russia during the open hearing (a closed session followed the televised one), apart from what Comey had already furnished in his written report one day previously.
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Markets gave a sigh of relief on Thursday, with most of the major US indexes gaining after the event. The DOW 30 (DIA) and the NASDAQ (QQQ) recorded new lifetime highs, in fact, during Comey’s testimony.
The US dollar (UUP) has recovered some ground against its trading partners, with the US Dollar index closing the day at 97.39 and a gain of 0.5% on the NYSE. US Treasury yields dropped after Comey’s testimony, while the US two-year Treasury yield (SHY) eased from 1.33% to 1.32%, and the ten-year yield (IEF) dropped from 2.21% to 2.19%.
The path ahead
With the event now out of the way for US markets, the focus will now likely shift to the next FOMC (Federal Open Market Committee) policy meeting, which is scheduled for June 14. The US Fed is widely expected to increase the federal funds interest rate by 0.25%, and we could see markets returning to their previous optimistic mood as they wait eagerly to see if the Trump administration’s currently stalled efforts will gain traction in 2017.