Market Update & Important Indicators:
The days long struggle to pass a health-care bill spurred the biggest weekly decline for major stocks indexes in months. On Friday, House Republican leaders ultimately abandoned their bill to replace the Affordable Care Act, which investors viewed as a key test of the new administration's ability to implement its wider policy agenda. That includes tax overhaul and infrastructure spending plans that helped lift U.S. stocks to record highs earlier this year. After spending much of Friday morning positive, stocks fell sharply as a proposal to replace the Affordable Care Act looked set to fall short of the number of votes needed to pass in the House of Representatives. In late-afternoon trading, major indexes regained ground after the bill was scrapped. The Dow Jones Industrial Average fell 59.86 points, or 0.3%, to 20596.72 after earlier falling as many as 127 points. The fall put its weekly decline at 1.5%, its biggest since September. The S&P 500 declined 1.98 points, or 0.1%, to 2343.98, ending the week down 1.4%, its worst weekly performance since November. Meanwhile, the Nasdaq Composite added 11.04 points, or 0.2%, to 5828.74 on Friday, notching a weekly loss of 1.2%. The health-care bill was viewed as the first real test of the Trump presidency, and some investors and traders had expressed concern that if it didn't pass it would put the rest of Trump's legislative agenda in jeopardy. The U.S. gold price also slumped on Friday, dropping 0.1% at 1,242.9 US$/oz.
European stocks edged lower Friday, tracking a modest pullback on Wall Street after the vote on a key U.S. health-care bill was postponed. The Stoxx Europe 600 finished down 0.2% despite an upbeat reading on the Eurozone economy, with shares of insurers and oil-and-gas companies leading declines. "This is an inflection point," said Philip Blancato, chief executive at Ladenburg Thalmann Asset Management. For markets, "this is the first real test of the Trump presidency, to see if it's really a presidency that can affect change, he said. Many investors still believe easy monetary policy and a strengthening global economy will provide a floor for stock markets even at high valuations. Surveys of purchasing managers showed Friday that the Eurozone economy grew at its fastest pace in six years in the first three months of 2017.
Investors in Asia's major equity markets regained some of their risk appetite on Friday, as expectations for a vote on a key U.S. health-care bill gave traders hope that the wider stimulus agenda of U.S. President Donald Trump was intact. Japan's Nikkei Stock Average closed up 0.9%, but lost 1.3% for the week. Korea's Kospi edged down 0.2% and Hong Kong's Hang Seng Index edged up 0.1%. In China, the Shanghai Composite Index gained 0.6% and Shenzhen's main board added 0.4%. The financial sector led gains in the region.
Australian shares rose on Friday, as investors shrugged off a delay in voting on an overhaul of the Affordable Care Act in the U.S. that's being seen as a test of President Donald Trump's ability to enact his corporate-friendly agenda. The S&P/ASX 200 index closed up 0.8%, led by energy stocks and Australia's Big Four banks.
The London Metal Exchange's three-month copper contract closed down 0.36% at $5,804/t. The other base metals finished mixed on Friday. Aluminium prices rose 0.3% at 1,929/t, whilst zinc prices also jumped 0.6% at 2,812/t. Falling for the day, lead prices dropped 0.9% at 2,343/t, tin prices fell 2.0% at 19,881/t, whilst nickel prices finished down 1.6% at 9,808/t.
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