President-elect Donald Trump Powers US Stocks

President-elect Donald Trump Powers US Stocks

President-elect Donald Trump Powers US Stocks

$DIA, $SPY, $QQQ, $VXX

President-elect Donald Trump looks to be very good for the US stock market, crushing the theories of the naysayers.

Asian stock markets tumbled shortly after Trump overtook Hillary Clinton in the presidential electoral vote count early Wednesday.

Then signals pointed to a deep dive for Wall Street, that did not happen.

Soon after Donald Trump was confirmed as America’s 45th President and he delivered an acceptance speech pledging to unify a deeply divided nation, global financial markets steadied.

The US stock market was cautious in the 1st hour of trading, but then moved due North, flirting by late afternoon with a record high for the DJIA.

 

Markets had been soft the weeks since 8 August. Last week, the US stock market capped a 9-day losing streak, the steepest since 1980. Many Wall Street watchers predicted a rocky turn for the market in the event of a Donald Trump victory.

But once traders digested that Donald Trump prevailed, they piled into healthcare and financial stocks, sectors seen as likely to fare poorly under a Clinton Administration.

Financial companies led the gainers, surging 4.2%. Banks and other financial stocks benefit from higher interest rates and less government regulation, 2th ings investors anticipate could happen during the Trump Presidency.

Utilities were down the most, sliding 3.5%, followed closely by consumer-focused stocks. Crude Oil prices closed higher after being down earlier on the day.

A sell-off in bonds sent prices tumbling, driving the yield on the 10-year T-Note up to 2.08$ from 1.86% late Tuesday, a large move. That’s the highest the rate has been since January 2016. That rate is a benchmark used to set interest rates on many kinds of loans including home mortgages.

Traders are selling bonds to hedge against the possibility that interest rates, which have been ultra-low for years, could rise steadily again under a Trump Administration.

Healthcare companies like hospital chains and some insurers that gained business from the Affordable Care Act’s aka Barack Obamacare coverage expansion took heavy losses. Meanwhile, shares jumped for drugmakers and pharmacy benefits managers that likely will face less regulatory scrutiny over price increases from a Trump Administration.

Traders bid up shares in defense contractors, anticipating the companies will thrive under a Trump Presidency.

Firearm sales typically surge when a presidential candidate who favors an expansion of gun-control laws is elected. That is not the case with Trump. That gave investors a reason to sell shares in gun makers.

Wednesday, the US major stock market indexes finished at: DJIA +256.84 at 18589.27, NAS Comp +57.58 at 5251.07, S&P 500+23.67 at 2163.20

Volume: Trade was heavy with 1.4-B/shares exchanged on the NYSE

HeffX-LTN Analysis for DIA: Overall Short Intermediate Long
Bullish (0.27) Bullish (0.30) Neutral (0.23) Bullish (0.28)
HeffX-LTN Analysis for SPY: Overall Short Intermediate Long
Neutral (0.04) Neutral (0.20) Neutral (-0.06) Neutral (-0.01)
HeffX-LTN Analysis for QQQ: Overall Short Intermediate Long
Neutral (0.08) Neutral (-0.15) Neutral (0.12) Bullish (0.25)
HeffX-LTN Analysis for VXX: Overall Short Intermediate Long
Bearish (-0.33) Bearish (-0.25) Bearish (-0.33) Bearish (-0.42)

Stay tuned…

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Paul Ebeling

Paul A. Ebeling, polymath, excels in diverse fields of knowledge. Pattern Recognition Analyst in Equities, Commodities and Foreign Exchange and author of “The Red Roadmaster’s Technical Report” on the US Major Market Indices™, a highly regarded, weekly financial market letter, he is also a philosopher, issuing insights on a wide range of subjects to a following of over 250,000 cohorts. An international audience of opinion makers, business leaders, and global organizations recognizes Ebeling as an expert.

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