The Dow Jones Industrial Average rallied 0.78% to 20,068 points – a record new high and the first time that the Dow climbed above key psychological resistance level of 20,000 points. Financial, Information Technology and Industrial were among the leading sectors yesterday.
The rally was again driven by positive earnings surprises and animal spirits spurred by the so called “Trump Rally”. Policy shifts since Trump’s inauguration was fast and furious. He announced the official withdrawal from TPP, pushed forward the oil pipeline projects to create more jobs, talked to car makers, and now orders a wall to be built at the Mexican border - all within less than a week in office.
His actions so far, were generally consistent with his promises during the election campaign. The simple and easy to remember slogan “buy American and hire American” will be his key pursuit in the foreseeable future.
GBP/USD extended its rebound last night, marking a 5.4% gain since 16th January 2017. UK’s Prime Minister Teresa May will meet Donald Trump in the White House this Friday. Markets expect this meeting to result in a closer relationship, both economic and political, between the two countries. A post-Brexit trade deal, NATO and immigration related topics will be carefully watched by investors.
Asian markets, however, are facing some profit taking and selling pressure ahead of the long weekend as most Asian markets will be closed during the Lunar New Year holiday.
CMC Markets is an execution-only service provider. The material (whether or not it states any opinions) is for general information purposes only, and does not take into account your personal circumstances or objectives. Nothing in this material is (or should be considered to be) financial, investment or other advice on which reliance should be placed. No opinion given in the material constitutes a recommendation by CMC Markets or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person.