Stock Market Rally, Dow Jones Hits Record High On Trump Bump

The stock market rally today is shocking professional traders, Dow Jones Industrial Average rose to the all the time high, ForexSQ experts team use different source to conducted this article about the stock market rally after US election 2016.

Dow Jones Rally

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The rally in U.S. stocks faltered after the Dow Jones Industrial Average rose to an all-time high, as investors speculated gains sparked by assumptions for pro-business policies under Donald Trump went too far too quickly. Metals climbed with the dollar, while bonds tumbled.

The S&P 500 Index wiped out its gains right after the Dow Average rose above its Aug. 15 record. Copper was set for its biggest back-to-back jump in five years, gaining alongside lead, zinc, aluminum and the companies that produce them. The dollar advanced against most major peers, while government bonds extended their selloff as Trump’s win bolstered bets on faster inflation.

Traders are betting Trump and a Republican-controlled Congress will lower taxes, ease corporate regulation and ramp up spending to spur economic growth. He pledged to at least double the $275 billion five-year building plans of rival Hillary Clinton, while saying infrastructure will become “second to none” with millions working on projects. That also means commodities used to build everything from airports to bridges would benefit under his presidency, according to Goldman Sachs Group Inc.

“Day two will digest what went on in day one,” said John Manley, who helps oversee about $233 billion as chief equity strategist for Wells Fargo Funds Management in New York. “The election is over. That was a big piece of uncertainty that hung over the market. From a business point of view, this means less regulation, and less regulation is viewed as being more growth, which should be viewed as a positive.”


MSCI’s global gauge rose 0.1 percent at 10:50 a.m. in New York, paring earlier gains. The Dow Average rose 129 points, taking it above its Aug. 15 record. The S&P 500 lost 0.1 percent to 2,161.37, erasing an advance of as much as 0.9 percent.

Drugmakers and banks jumped on bets Trump’s government will mean less regulatory oversight than a win for Clinton. Utilities, real estate investment trusts and consumer staples sank. Rising bond yields make their high relative dividend payouts less attractive.

In the 22 elections going back to 1928, the S&P 500 has fallen 15 times the day after polls close, for an average loss of 1.8 percent. Stocks reversed course and moved higher over the next 12 months in nine of those instances.


All industrial metals advanced on the London Metal Exchange, with zinc adding 1.8 percent, nickel up 0.3 percent and copper advancing 3.4 percent. The LME index on Wednesday rose 2.1 percent to its highest level since June last year.

“The clearest message delivered by Donald Trump in his election victory speech was a focus on greater infrastructure spending in the U.S.,” Goldman’s analysts including Damien Courvalin and Jeffrey Currie said in a Nov. 9 report. “Without specific details it is hard to quantify the impact on commodity demand, however such policies would support steel, iron ore, zinc, nickel, diesel and cement.”

Oil fell as the market’s focus shifted from the election to questions about OPEC’s ability to rebalance crude supply and demand.

West Texas Intermediate for December delivery lost 44 cents to $44.83 a barrel on the New York Mercantile Exchange after earlier rising 0.8 percent. Brent for January settlement fell 20 cents, or 0.4 percent, to $46.16 a barrel on the London-based ICE Futures Europe exchange, trading at a 60-cent premium to January WTI.


A $15 billion Treasury 30-year bond auction Thursday will offer fresh insight into global sentiment toward U.S. debt under the pending stewardship of President-elect Trump one day after traders greeted his election by inflicting the biggest selloff in five years. A sale of 10-year notes Wednesday drew the weakest demand since 2009.

“They’re basically selling Treasuries because they really don’t know what Donald Trump has in store for them,” said Tom di Galoma, managing director of government trading and strategy at Seaport Global Holdings in New York. “Most of the activity is coming from overseas. They’re not sure what he’s all about.”

Benchmark 10-year note yields rose two basis points, or 0.02 percentage point, to 2.08 percent. The yield on 30-year bonds increased three basis points to 2.87 percent, after jumping the most since October 2011 Wednesday.

Forex Currencies

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The dollar surged to the strongest level since March as Trump’s proposals are seen by economists as inflationary and leading to higher U.S. interest rates. The odds that the Federal Reserve will tighten policy in December have risen to 86 percent from 76 percent at the end of last week, based on futures.

“A Trump presidency is not necessarily negative in the short term,” said Sonja Marten, head of currency strategy at DZ Bank AG in Frankfurt. “Especially given that he’s probably going to expand fiscal spending next year, which might give a positive impulse to the economy” and in turn means the Federal Reserve can raise interest rates.

The Dollar Spot Index, which tracks the currency against 10 major peers, advanced 0.7 percent. The greenback rose 0.7 percent to 106.38 yen, touching the highest since July, and was little changed at $1.0903 per euro.

Mexico’s peso tumbled for a second day, sinking 3.5 percent to 20.5456 per dollar. While Trump’s conciliatory tone in his day-after speech eased the worst of investors concerns, there’s still plenty to fret about. Chief among them is whether President Trump will be as harsh as Candidate Trump when it comes to renegotiating free-trade deals, cracking down on illegal immigration and building a wall along the U.S.’s border with Mexico.

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