Wall Street: Equities underwater; Trump vs. Nieto risk $584 billion in trade

On the third trading week of 2017, major US equity indices finished slightly underwater as the US GDP figures were worse than expected at 1.9% YoY. Furthermore, Trump's 'friendly' relationship with Mexico fell off the wagon when Mexican President Enrique Pena Nieto canceled his scheduled visit to Washington. 

At the time of reporting, the Dow Jones Industrial Average finished (7)-points down to end the week 93-points above the psychologically important 20,000 milestone. Meanwhile, the broader S&P 500 Index decreased 2-points to finished the trading week at 2,294.69, while tech-heavy Nasdaq Composite was up 5-points at 5,660.78. On the other hand, U.S. Treasuries on 10-year fell two basis points to 2.48%, while 10-year German bonds pushed the yield to 0.46%.

New 'Bond King' on the block
Bloomberg reports, "For Ford O’Neil at Fidelity Investments, the newest king of the bond world, now isn’t the time to go out on a limb. His reign is starting with more questions than answers, about the sweeping changes Donald Trump is promising and the Federal Reserve’s policy outlook."

The report continues, "On the one hand, he’s confident in the reflation trade that’s gripped financial markets since November. That means owning Treasury Inflation Protected Securities, or TIPS, and leveraged loans in his $25.7 billion Fidelity Total Bond Fund to protect against accelerating price growth and climbing yields. Yet he’s also trimmed an overweight position in corporate bonds and is staying close to his duration benchmark. Last year, bets on high-yield and energy-company debt helped his fund more than double the benchmark return, earning him and his team Morningstar Inc.’s 2016 fixed-income fund manager of the year award this week."

Margins declined for the legend UBS

Another Bloomberg report, notes, "UBS Group AG suffered a net 15.2 billion francs ($15.2 billion) in withdrawals during the final three months of last year, in part because investors moved money out of Switzerland before the government shares their data with tax authorities, a trend that’s expected to continue this year."

"The bank fell as much as 3.9 percent in Zurich trading, pulling other wealth managers lower, after saying all of its money management units saw net redemptions last quarter. UBS made just 73 cents in revenue on every $100 it oversees in wealth management, the lowest in the bank’s history, according to analysts at Citigroup Inc. led by Andrew Coombs. “The wealth management trends are concerning,” the analysts wrote in a note to clients," the report concluded.

 Key events in the US next week as FOMC followed by payrolls Friday