President Trump usually evokes very distinct reactions from supporters and detractors alike, but when it comes to the markets, his administration has already proven to be an engine of growth. Ever since Trump was elected, the Dow Jones is trending upward. The blue chip index had been toying with the 20,000 point mark for quite a while now, and after Trump signed a few executive orders the markets responded in an overwhelmingly positive manner.
Trump Signs, The Dow Jones Adds 155 Points Surpassing the 20,000 Mark
The main force behind this sudden surge in the markets is clearly Trump’s indication that he will deliver on his promises. Markets rose after the election because investors expected Trump to deliver on infrastructure projects and de-regulation. Now the fact that his first executive orders included the re-opening of the Keystone XL pipeline project and the Dakota Access pipeline, reinforced investor sentiment. The president also signed laws to enforce immigration laws, de-regulate markets and build a wall along the border with Mexico. This further cemented bullish sentiments that pushed the Dow Jones above the 20,000 mark.
Positive Outlooks in the Trump Era
Apart from the executive orders, it seems like many of those blue chip companies are moving ahead with solid returns and a bright outlook for the near future. Other companies and indexes also joined the 20,000 point rally, riding on the same news and a positive outlook. The S&P 500 closed 0.8% higher on Wednesday, and even markets elsewhere rallied, with the Toronto’s TSX also closing at record highs.
Now the challenge for the markets is to keep their positive outlook. In order to do so Trump must deliver on more infrastructure projects and job growth. With his buy American policies, he might be able to add to the momentum in the markets going forward. Hopefully for investors and the average American alike, his administration can keep on delivering on those promises without raising the prospects for inflation too much, and without stifling international commerce. As much as Trump would like to impose more protectionist policies, there is a limit to the tariffs his administration can impose before it starts hurting the consumer.
In the meantime it seems that there is more room for the bulls to continue running. How much room they have is unknown, and whether or not the average Trump voter will benefit from this rally is yet to be seen. Nevertheless, it is an exciting time to be an investor and the 20,000 mark is a nice psychological barrier to cross.