Probability of a continued Trump Stock rally

By all accounts, the Trump stimulus to the US stock markets continues to have positive effects. The Standard & Poor 500 touched 2,241when it rose 29 points. The DJIA or Dow Jones Industrial Average went up almost 300 points to touch half point behind 19,550. These rises can be attributed to Trump winning the presidential election.

Outlook down

Analysts do not expect this to happen. Many are in doubt whether the Trump rally may continue. Bill Gross, an experienced bond market professional, said that the trade policies supposed to be instituted by Trump will destruct parts of the market and also of the American economy. He is also of the opinion that the new would-be President’s tax and spending plans will generate more debt which can only hurt longer term growth in the medium and long future. Charles Himmelberg, a strategist at Goldman Sachs, agrees to this estimation. The latter made a further prediction that the Standard & Poor 500 will close in 2017 at 2,200. This is 40 points below the present number. In the short term, however, it can be expected that the Trump Presidency will push up the market.

Market caps rose by 1.6 percent during the stunning month long upswing. The Dow closed finally at 17,888 on November 4. In December, the same stock exchange went up by nine percent or 1,700 points. If this trend continues in 2017, stocks will go up by about 18,000 points within Christmas 2017. This is double the current position of the market.

Consumer stocks

The problem is that analysts get jittery when all stocks start to rise. This is the sign that the market is up to no good. However, this trend is absent in this particular case. The most upward stocks are those which will benefit from policies instituted by Donald Trump. He has discussed a few economic measures. The measures have the same objective, increasing the money amount in the pockets of the consumers, via tax cuts.

Trump’s policies led to the spurt of consumer stocks. Nike shares went north by three percent on December 7. Shares of Home Depot, the retailer, also went up by the same percentage. Stocks of pharmaceutical companies, however, dipped. Pfizer stock values went south on December 7. In Time magazine, where Trump was quoted to be the Person of the Year, the magazine said that he would most likely bring down drug prices.

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