The Trump Rally Extends, DJIA in Record Territory “Again”

The Trump Rally Extends, DJIA in Record Territory “Again”

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)

Stay tuned…

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