Some are calling it a Trump rally. Other financial analysts are seeking to place a different label on Trump's increasingly positive impact on our markets. Whatever you call it, however, market experts agree that President-elect Trump has unleashed the market's "animal spirits" and that Wall Street is practically "euphoric" over the possibilities.
On Wednesday, MarketWatch reported that crude oil has now "joined the Trump party on Wall Street" and that both the Dow industrials and S&P 500 reached "all-time highs in Wednesday trade, extending a record run for equities:"
But some market specialists appear to be struggling to pin a name to the recent moves across global markets, which has pushed the S&P 500 index SPX, +0.15%Dow Jones Industrial Average DJIA, +0.33% and Nasdaq Composite IndexCOMP, -0.18% into record territory since President-elect Donald Trump’s Nov. 8 victory over Hillary Clinton.
Steve Barrow, currency and fixed-income analyst at Standard Bank, said in a Wednesday research note “whatever fears might exist in some quarters about Trump’s win, some sort of animal spirits might have been spurred.”
The Dow industrials have risen nearly 5% since the Nov. 8 election outcome, the broad-stock benchmark S&P 500 index has climbed 3.8% as of Tuesday’s close of trade, while the Nasdaq Composite has picked up 4.5% over the same three-week period. The small-cap focused Russell 2000 RUT, +0.37% which is most sensitive to economic prospects for the country, has jumped more than 12%.
MarketWatch notes that in contrast to the policies of the last eight years, Trump's proposed stimulus measures will invigorate the economy as markets are betting, in part, "that the incoming leader of the free world will make good on those promises."
This means job creation and positive growth. As result, MW reports, "infrastructure companies, commodities associated with building and bank shares, among other assets, are moving higher" and Wall Street is "nearly euphoric over the possibilities":
Financial shares XLF, +1.08% are up about 12% in November, the best performer in the S&P 500’s 11 sectors, while industrial shares are on track to book a 8.5% monthly gain Giant investment bank and Dow component, Goldman Sachs’sGS, +3.44% shares are on pace for a 19% climb while J.P. Morgan Chase & Co.’s JPM, +1.06% shares may be the second-best performing Dow component this month, up about 14%.
On the industrials front, Caterpillar Inc. CAT, +0.91% is in position to advance about 13% in November.
On Wednesday, crude futures CLF7, +7.32% LCOF7, +7.87% soared, joining the party in risk assets. However, the rise has more to do with the prospects of a pact to curb crude output by the world’s largest producers of oil.
In response, Goldman Sachs chief U.S. strategist David Kostin stated that the "prospect of lower corporate taxes, repatriation of overseas cash, reduced regulations, and fiscal stimulus has already led investors to expect positive [earnings-per-share] revisions."
That's a far cry from the economic doomsday the Left and its mainstream media minions keep touting.
