Two Years In, President Trump Holds Stock Market Bragging Rights

Two Years In, President Trump Holds Stock Market Bragging Rights

Two Years In, President Trump Holds Stock Market Bragging Rights

$DIA, $SPY, $QQQ, $RUTX, $VXX

Wednesday, US stocks rallied with broad gains led by the technology and healthcare sectors as investors made bets that a divided Congress would be good for equities.

Democrats won control of the House Tuesday, while President Donald Trump’s Republican party expanded its Senate majority, pointing to a political gridlock in Washington.

The S&P’s biggest boosts came from the S&P tech sector, which rose 2.4%, and the healthcare index, which gained 2.8%, as investors were more comfortable taking on risky bets.

The consumer discretionary sector was also a strong gainer as Amazon.com (NASDAQ:AMZN) soared.

We do not believe that President Trump’s agenda that he has already accomplished gets unwound. Now we have gotten a relief rally because the market got exactly what it expected.

While a divided Congress will make it harder for The Trump Administration to push through new legislation such as additional tax cuts, investors do not expect a reversal of tax cuts and deregulation measures that have already been enacted.

The FOMC began its 2-day monetary policy meeting Wednesday, but is not expected to raise rates until December and if they are dovish at all expect a strong run into January 2019.

The Fed could flag a possible slowdown in the housing market and a dip in business investment as reason to think growth is slowing.

Bank stocks were up but underperforming the broader market as US Treasury yields slipped and investors bet that the divided Congress would hamstring any efforts for additional fiscal stimulus.

Wednesday, the major US stock market indexes finished at: DJIA +545.29 at 26180.30, NAS Comp +194.79 at 7570.95, S&P 500 +58.44 at 2814.03

Volume: Trade on the NYSE came in at 887-M/shares exchanged

Advancers outnumbered decliners on the NYSE by a 3.07-to-1 ratio, on the NAS a 1.90-to-1 ratio favored advancers.

The S&P 500 posted 34 new 52-wk highs and 3 new lows, and the NAS Comp recorded 61 new highs and 61 new lows.

  • NAS Comp +9.7% YTD
  • DJIA +5.9% YTD
  • S&P 500 +5.3% YTD
  • Russell 2000 +3.0% YTD

HEffX-LTN’s overall outlook for the US major stock market indexes is Bullish to Very Bullish in here

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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