“The industrial average has now topped 20,000, rising 9 percent since its close on Election Day. Stronger U.S. economic data and optimism about Trump’s business policy, among other factors, have pushed not only the Dow, but also the other major averages and small-cap stocks, higher in that time,” Pramuk reports. “Experts said Trump’s proposals, including corporate tax cuts, repatriation of cash overseas, deregulation and infrastructure spending, give investors enough hope for rising corporate earnings that the Trump enthusiasm may continue well into his administration. ‘The market is perceiving this as a business-friendly administration that is coming into office for the next four years… It wouldn’t take much to give earnings a real boost. I think that’s where the market is coming from and I think it will continue,’ said Bruce Bittles, chief investment strategist at Baird.”
“While the Dow components are considerably less industrial than they used to be, most of the companies have a lot to gain from Trump’s plans. He wants to cut the corporate tax rate from 35 percent to 15 percent and touted that plan in meetings with business executives since he took office,” Pramuk reports. “Trump will try to give companies incentives to bring cash back to the United States. Apple, for example, has $216 billion parked abroad. Goldman Sachs and JPMorgan Chase would benefit from looser financial regulations, while Exxon Mobil and Chevron could get boosts from easier energy production rules.”
“Trump has already signaled he will be friendly to the oil and gas industry, as on Tuesday he signed executive orders to advance the controversial Keystone XL and Dakota Access pipelines,” Pramuk reports. “‘I think that all of this together has encouraged investors, given them some semblance of hope,’ said Robert Pavlik, chief investment strategist at Boston Private Wealth.”
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MacDailyNews Take: Boom!