Just two weeks after President-elect Donald Trump won the presidency, the stock market has hit record highs. It appeared that Trump’s business friendly, pro-growth, and America-first policies have been a boon for the market before he has even taken office.
U.S. equities closed higher on Tuesday, hitting new all-time highs, as investors digested housing data and kept an eye on President-elect Donald Trump’s policy agenda.
The Dow Jones industrial average rose about 70 points, closing above 19,000 for the first time ever, with Home Depot contributing the most gains.
The S&P 500 closed over 2,200 for the first time, as telecommunications rose about 2.1 percent to lead advancers. The Nasdaq composite also closed at all-time highs, rising approximately a third of a percent.
Tuesday’s record-setting session came a day after the three major indexes, along with the small-caps Russell 2000, closed at all-time highs. Monday’s rally was led by oil, which rose nearly 4 percent to lift energy stocks.
Stocks have also been bolstered by Trump’s surprising win over Democrat Hillary Clinton, as expectations for deregulation in a number of sectors and tax cuts have increased optimism in the U.S. stock market.
“You’re fully priced in on the short end of the curve” for a rate hike, said Gene Tannuzzo, portfolio manager at Columbia Threadneedle Investments. The two-year note yield held around 1.08 percent, after hitting its highest level since 2010. The benchmark 10-year yield held near 2.31 percent. The recent rise in yields “is pretty remarkable, especially considering … the two election surprises we’ve gotten this year, with Brexit in the UK and the election here.”
Bruce Bittles, chief investment strategist at Baird, discussed that things could keep moving up: “From a time standpoint, this may be just the beginning.” He added, “Don’t forget, we spend about three months consolidating before this breakout after the election.”
“We are in a transition period on a number of fronts. First, we’re moving from an interest-rate driven market into an earnings-driven market,” Bittles said. “Also, something most people are missing, is we’re getting a more business-friendly administration.”
Phil Davis, CEO at PSW Investments, pumped the brakes a bit: “It’s like a rocket at the apex of its trajectory. When a rocket launches, it rises up quickly, then it slows down and gravity starts pulling back down, but it does hang there for a bit.”
This is great news and hopefully the Trump effect not only continues but gets even stronger come Jan. 20. This country is primed for an economic renaissance if, God willing, Trump sticks to his promises and does what needs to be done to allow the U.S. economy to really thrive.