Market Insider

Now that Trump has spoken, this is where traders are turning

Is Trump the biggest risk to his own rally?

Thursday will be noisy with Fed speakers and confirmation hearings for Cabinet-level nominees for the Trump administration.

It is also the last trading day before the first big blast of fourth quarter earnings news. JP Morgan, Wells Fargo and Bank of America are among the names reporting Friday.

Stocks were choppy Wednesday but found their footing to close higher, with the Dow up 98 points at 19,954. The was up 6 at 2,275, and the Nasdaq closed at a record 5,563, up 11. President-elect Donald Trump, at his first postelection press conference, did shake the broader market temporarily Wednesday, when he criticized the pharmaceutical industry for its pricing practices and the production of drugs outside the U.S.

He said he was looking to the industry to bid on drug prices.

Trump disappointed some in the markets by not providing more details on the tax cuts or stimulus spending policies that have driven stocks sharply higher since his election.

The broader market reversed losses, but biotech remained under pressure. The iShares Nasdaq Biotech ETF ended down 3 percent. Trump also said he would stop the industry from "getting away with murder," and he would extend that to other industries.

"The market, as a voting machine, said he came out OK," said Sam Stovall, CFRA chief investment strategist.

Trump also repeated that he would have Mexico pay for a wall on its border, and the beaten-down peso declined further during his briefing. He also said he would begin negotiations with Mexico as soon as he takes office. Trump has said he would renegotiate NAFTA.

Additionally, he reiterated that U.S. companies that manufacture goods overseas will pay a hefty tax when their goods are imported back across the border.

"Basically, the market's movement today gives you an indication they're not going to be responding to his press conferences because he'll be saying some sensational things that might not reflect what's going to be done, and the focus should be more on the policy wonks, the ones that are structuring it and implementing it. If the market was paying attention to what he says, it would have fallen and it would have stayed down," Stovall said.

Traders, meanwhile, have been waiting for earnings season to begin, after the stock market's big run since Election Day.

Stovall said the earnings season could be better than expected. In fact, history is on its side.

"Earnings are expected to be up more than 4 percent this quarter. In each of the last 19 quarters, the actual earnings beat estimated earnings by 3.5 percent. That means earnings are likely to be up closer to 7.5 percent," said Stovall. Banks are first to report, and financial stocks have risen about 17 percent since the election, on the prospect of higher interest rates and an easier regulatory environment. Financial sector earnings are expected to be up about 15 percent.

On Thursday, there are more than a half dozen Fed appearances, starting with St. Louis Fed President James Bullard, who will appear on CNBC's "Squawk Box" at 7 a.m. Fed Chair Janet Yellen wraps up the day with an evening town hall meeting for educators.

Thursday's confirmation hearings include former GOP candidate Ben Carson, as Secretary of Housing and Urban Development and Mike Pompeo as CIA diretor. The Senate Armed Services Committee will hold a confirmation hearing for retired Marine Gen. James Mattis to be secretary of Defense. Former Exxon Chairman Rex Tillerson testified for one day Wednesday at a confirmation hearing for Secretary of State.

There is a batch of economic data including weekly jobless claims and import prices, both at 8:30 a.m. ET. The federal budget is expected at 2 p.m.

Fed speakers include:

8:30 a.m. ET—Philadelphia Fed President Patrick Harker in Malvern, Pa., at the Main Line Chamber of Commerce Annual Meeting on the economic outlook.

8:45 a.m. ET—Chicago Fed President Charles Evans and Atlanta Fed President Dennis Lockhart in Naples, Fla,. at the American Council of Life Insurers Executive Roundtable.

12:30 p.m. ET—Atlanta Fed President Dennis Lockhart in Naples, Fla., at the Naples Chamber of Commerce on the economic outlook and monetary policy.

1:15 p.m. ET—St. Louis Fed President James Bullard in New York at the Forecasters Club of New York.

1:45 p.m. ET—Dallas Fed President Rob Kaplan in Dallas at the Dallas Regional Chamber Annual Meeting.

7:00 p.m. ET—Federal Reserve Board Chair Janet Yellen will host a town hall meeting with educators from across the country. Yellen will speak about the Fed's mission and take questions.

CORRECTION: This story has been updated to make clear that the hearings for Rex Tillerson ended Wednesday.