SPX, DJIA, and NDX opened up about 1% higher, which was expected based on the USDJPY pair openings levles. However, it is good to be cautious, as during the early trade the market is thin. We must not forget that historical markets are willing to revers after election gaps as liquidity rises.
A prerequisite for caution is the fact that much of the valuation of the indexes' prices was influenced by Trump's statement to announce a phenomenal tax reform this week. Many analysts, however, are of the opinion that this will not happen and expect the details of the President's plan to go through the summer. This would have a negative effect on risk appetite and we should not forget the failure to vote on the health reform.
Increasing tensions in North Korea and the upcoming second round of French elections will also cool down the passions and make investors cautious about new purchases.
Trader Nikolay Georgiev
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