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Optimism Push Stocks to New Highs on Trump Rally

  • By LEED GA, Charlene on Green
By Charlene on Green

Did you miss it... The Trump Rally. Not his larger-than-life airplane hanger rally. I mean did you miss the Trump rally on Wall Street?
 
Before the sun rose on President Donald J. Trump's election investors emptied their huge (to borrow a word - or two - from Trump) huge piggy banks on to the stock market.
 
The operative word was and is optimism. Optimism in the financial sector after the election was worth enough to bet on. And bet big.
 
The Dow Jones Industrial Average closed above 20,000 for the first time ever on January 25, 2017 up nearly 1700 points since President Trump's victory.
 
Election Day 2016, the Dow closed at 18363 and soared 257 points the day after election. It's been a mad bull run to 20,000 points and climbing only five days after President Trumps inauguration.
 
Investors didn't always put their money where their mouth was. Many had been strategizing for a Hillary Clinton presidency, to continue - even tighten - the reigns on the financial sector, which could have lead to a bleaker outlook than the past 8-year recession.
 
While, according to Deutsche Bank analysts, "the Trump administration hopes to jolt the economy out of slow growth and low inflation with spending, tax reform and deregulation."
 
And though it's tough to put a value on optimism, the idea that the US economy could brighten up was enough to unleash a seven year stash of penned up cash.
 
Hosts of Fox Business Network Wall Street Week discussed stock market outlook under President Trump's policy driven economy. TD Ameritrade Managing Director J.J. Kinahan called it "unbridled" by even the most negative news or attacks on Trump and his administration or his controversial policies. Kinahan said "there is so much optimism right now and it seems tough to stop." He added, however, for small or new investors to "be careful and don't go all in right now, go in slowly."
 
Probably the day to have bought stocks was November 7, 2016. But, there appears to be new buying opportunities popping to new highs each trading day. And historically, the first February after a new President has been a good entry point to the stock market.
 
Neuberger Berman Managing Director Holly Newman Kroft belives the markets were trending inline with long term averages, though she expressed concerns of "increased volatility." She said, "You've got to be cautious, there will be pull backs in a healthy functioning economy. And I think that will provide investors with a great opportunity to increase their exposure."
 
Behind the wind of optimism, markets become less about trading or shifting funds from here to there, less of a gamble so to speak. The money marketplace becomes a realistic investment vehicle in which each and every passenger has a chance at a winning ticket going beyond optimism more toward enthusiasm.
 
"I think there is a diiferent tone in what CEOs are talking about and to me thats one of the more important things," Kinahan said. "If you think about the earning calls nine months ago, it was like 'we think we can continue at this pace in this sort of economy.' Now its 'we see growth rates, the US being a healthy economy.' This is the tone CEOs have set now. The overall tone has been we see growth opportnity in the way we havent heard in a long time."
 
An optimistic outlook on the country's economy has even greater value than simply savvy investors making money. While enthusiasm leads to everyone making more money. Enthusiasm means new money coming into the markets, new goods, new business, new industry, even new thinking that might make the markets great again.

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