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”


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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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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