The Trump Rally Extends, DJIA in Record Territory “Again”
$DIA, $SPY, $QQQ, $VXX
Donald Trump’s promises to ramp up infrastructure spending and ease banking regulations are driving the DJIA North of the broader market.
The DJIA drove to a fresh record Tuesday as the S&P 500 Index hangs 1.74 points below its all-time high and Monday traded near its biggest discount to the DJIA since May 2014.
The 2 Key indexes are the least correlated in almost 6 years as the “blue-chip” Dow benefits from the bright outlook for industrial companies and banks opened up by Donald Trump’s win, while losses in technology companies and utilities pull at the S&P 500.
Speculation that the Trump Admin’s agenda will favor US manufacturers and big factory employers has boosted the DJIA, which counts industrial stocks as its biggest sector with a 20% weighting. They are less than 11% of the S&P 500.
The DJIA is set to out perform the S&P 500 on an annual basis for the 1st time since Y 2011, rallying 10% YTD , while the S&P 500 has climbed 7.9% in the frame.
The day before the election they were pretty much side by side, with the DJIA +4.8% in Y 2016 and the S&P 500 headed for a yearly advance of 4.3%.
The 7.9% rise in the industrial stocks since 7 November is 2nd only to the 15% spike in financial shares, with banks buoyed by diving bond yields.
Fact: the S&P 500’s industrial sub-index rose to a level on 1 December that marked its biggest premium since Y 2011 over the wider index..
Interest sensitive utilities led losses in the S&P 500 since the election, -5.2%, while tech shares have fallen by 1.3%. Tech has the biggest weighting in the S&P 500 at 21%, followed by banks with 15% and healthcare and consumer discretionary shares at 14 and 12%, respectively.
Tuesday, the US major stock market indexes finished at: DJIA +35.54 at 19251.78, NAS Comp +24.11 at 5333.00, S&P 500 +7.52 at 2212.23
Volume: Trade was moderate with about 860-M/shares exchanged on the NYSE
- Russell 2000 +19.5% YTD
- DJIA +10.5% YTD
- S&P 500 +8.2% YTD
- NAS Comp +6.5% YTD
|HeffX-LTN Analysis for DIA:||Overall||Short||Intermediate||Long|
|Bullish (0.48)||Bullish (0.35)||Very Bullish (0.60)||Bullish (0.47)|
|HeffX-LTN Analysis for SPY:||Overall||Short||Intermediate||Long|
|Bullish (0.29)||Neutral (0.21)||Bullish (0.48)||Neutral (0.19)|
|HeffX-LTN Analysis for QQQ:||Overall||Short||Intermediate||Long|
|Neutral (0.03)||Neutral (-0.04)||Neutral (0.06)||Neutral (0.08)|
|HeffX-LTN Analysis for VXX:||Overall||Short||Intermediate||Long|
|Bearish (-0.39)||Bearish (-0.41)||Bearish (-0.42)||Bearish (-0.33)|
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