The DJIA or Dow Jones Industrial Average closed a little less than the 20,000 mark after the President-Elect’s first news conference. The DJIA was 50 points fewer from the psychologically important mark. The DJIA went up by 0.5 percent or 98.75 points, to close almost at 19,954.28.
Talks to action
According to Kent Engelke of Capital Securities Management, the Trump administration has talked long enough. It must be now transformed into policies and action. The markets’ direction, he said, will be influenced by the speed Trump moves to implement his election promises into policies and actions. Tax reform and regulatory relief with dictate the markets’ immediate direction. If Trump does not follow up on his promises, then prices may dip.
Similar upsides were also enjoyed by the Nasdaq, moving up 0.2 percent or 11.83 points to end at a peak 5,563.65. The Standard & Poor 500 index gained 0.3 percent or 6.42 points to finish at 2,275.32. Important indexes swung between small losses and small gains during trading sessions. Among the notable losers were biotech stocks. This was the result of the President-Elect’s comment that biotech companies are flouting rules with impunity when it comes to pricing drugs. Maximum gains were enjoyed by energy companies. They rose in tandem with the rise of crude oil prices.
According to Mark Luschini, of Janney Montgomery Scott, markets are going through a period of substantial indecisiveness. A sustainable stocks rally is not possible. He said that investors are trying to understand both sides, wanting to understand how the earnings will be and the appearance of the final Trump administration when it came to real world policy.
The electoral victory for Trump has led to Markets reaching record highs. This rally has not shown any signs of abatement, leading a number of analysts to worry that gains are now overdone. Investors have keenly watched Rex Tillerson’s confirmation hearings, the Trump nominee to be the head of the State Department. The hearings had deep discussions about China and Russia. Joseph Quinlan of Bank of America Private Wealth Department, is of the opinion that the incoming Trump administration has taken a hard line approach towards China, but was sympathetic towards Russian concerns. In his report, Quinlan said that changing American policy towards China and Russia presents Corporate America to an asymmetric risk position. He pointed out that American financial linkages with China is much thicker compared to Russia.