Treasurys Resume Decline, Stocks Hit Fresh Highs on Strong Earnings, Policy Progress

“Trump Trade” Regains Steam   The beginning of this week has brought forth a bit more clarity for investors with regard to the execution of expected US fiscal policies under the new president.  Global markets have observed Donald Trump take steps to push forward a few of his key pro-growth and security pledges, including the reduction of regulation on domestic manufacturers, approval for the development of oil pipelines in the Midwest, and US border control actions.  The perception of swift action to follow through on promised change has reignited the “Trump Trade”, with equity markets touching record highs and Treasurys selling off across the curve.  Further bolstered by robust corporate earnings, the Dow Jones Industrial Average crossed the psychological milestone of 20,000 for the first time during today’s session as it finished up more than 0.75%, while the S&P 500 and Nasdaq both hit record highs for the second consecutive day.  US Treasurys tumbled again today, with yields/swap rates increasing 2-7 bps across the curve, pushing the yield on the 10-year note above 2.51%.  The price of gold fell, shedding 1% on the day to just over $1,200 per ounce.            

Immigration/Border Protection Highlight Wednesday’s Presidential Agenda
While visiting with the Department of Homeland Security this afternoon, President Donald Trump signed directives to move forward with the construction planning of a wall along the southern border of the US, the first step in fulfilling one of the most controversial pledges of his campaign.  As it currently stands, Trump will need Congress to approve [$10 – $20 billion] funding for the building of the wall, with promised/threatened reimbursement from Mexico.   In an effort to further solidify the border, the Trump administration announced that it plans to move forward with tighter controls on immigrants entering the United States, with the potential for a 120-day suspension of refugee admissions altogether.  More color is expected to be provided tomorrow regarding targeted refugee allotments for 2017.  The Mexican peso actually surged against the dollar, gaining more the 2.25% on its way to just above 21 peso per dollar.  There was little in the way of important economic data released today, but tomorrow has a full slate including weekly continuing claims, new home sales, PMI and wholesale inventories.