Wall Street's expectations overdone?

Wall Street gave back some gains overnight on Monday while investors begin to calculate what a Trump presidency and policies of increased fiscal spending and tax cuts would imply in respect of the Fed. 

While we are looking for inflation to pick up and subsequent action from the Fed being more active in 2017, the concerns are where will the funds actually come from when running such large deficits? It appears that Wall Street's expectations are now somewhat overdone and we are seeing a respite from the hysteria of Trump's success to date.

Meanwhile, we are waiting to get a more concise outlook from the  President Elect Trump and Yellen is due to testify this week as well that could offer more clarity on the Fed's position, especially as we approach the Dec meeting where markets have been pricing in a rate hike from the Fed.

After another modest rally to the upside to score yet another record level, the Dow Jones Industrial Average was finishing the day flat at 18,847. The S&P 500 index dropped fell 2 points, or 0.1%, to close at 2,162 while the Nasdaq Composite fell 20 points, or 0.4%, to 5,216. 

US dollar index consolidates gains, hovering near 100.00

Market wrap: dollar keeps rising, US bonds dropping - Westpac