Dow Surges, Wednesday, Following President Trump’s Congressional Address

Even by market open on Wednesday, US equities were already trading higher, marked by the Dow Jones Industrial average climbing higher than 21,000 points for the first very first time, following President Donald Trump’s Congressional address.

Of course, President Trump delivered the speech Tuesday night, an oration that actually received wide positive response despite an absence of specifics regarding tax reform and deregulation.

Penn Mutual Asset Management portfolio manager, Zhiwei Ren notes, “The major positive from the speech is he delivered on his ‘America first’ message, but he did so in a positive and uniting way. If his message of ‘America first’ can succeed, this could be positive for the economy [in the near term].”

With that, then, The Dow Industrial Average jumped today, about 300 points, with a majority of the gains coming from movement from Goldman Sachs. The first time the 30-stock above 20,000 was January 25. In fact, Dow futures had shot up 150 points before market open.
In addition, though, the Standard & Poors Index also climbed, though only about 1.4 percent (about 18 points). Financials rose 2.8 percent to lead the advancers, with the Nasdaw Composite also rising 1.34 percent (34 points).

In response to criticisms over President Trump’s reluctance to detail his plans, Oanda senior market analyst Craig Erlam comments, “While it’s understandable that these things take time to plan and implement properly, markets have been way ahead of the game since Trump’s victory and there comes a time when we need to know exactly what they’re rallying on.”

And all of this is important, of course, because equities had actually closed down on Tuesday (before the address), snapping an impressive 12-day growth streak.

In addition to market momentum, investors are also keeping a close eye on key economic data like Federal Reserve rate increase profitability, which also surged.

Looking closer at related data, personal incomes rose by 0.4 percent in the montyh of January, which surpassed early expectations, though consumer spending slowed. But with the personal consumption expenditures (PCE) price index jumping nearly 2 percent in the last year, inflation seems to be approaching the Fed’s target; and the now about 70 percent of the market expects a rate hike at some point this month.