Trump Effect: Dow Tops 20,000

from – Polizette – by Edmund Kozak

The Dow Jones Industrial Average surged above the 20,000 mark for the first time in 130-year history on Wednesday.

The stock market index reached an all-time high of nearly 20,030 per share at approximately 9:20 a.m.

The historic climb in the market follows an already record-setting boom that began following President Donald Trump’s election, as his promises to put American economic interests first and make the corporate tax regime far friendlier to growth has instilled renewed confidence in the U.S. economy.

That the record was set the day following Trump’s announcement that the Keystone and Dakota Access pipelines would go ahead is not coincidence.

Signs of the “Trump effect” are not limited to the market. Even in the immediate aftermath of Trump’s election, IBM announced plans to hire 25,000 workers in the U.S. and an investment of $1 billion in training and developing new American talent.

That same week, Federal Reserve Chair Janet Yellen announced that the Fed’s raising of interest rates by .25 percent, further signaling a strengthening American economy. The rise “is a vote of confidence in the economy,” Yellen told reporters following the decision.

The Carrier company canceled plans to move manufacturing production to Mexico, protection over 1,000 jobs in Indiana. Trump has also said Sprint plans to create 5,000 additional jobs in the United States, while Ford canceled plans to move much of its small car production to Mexico — though the CEO of the motor giant denied the s0-called “Trump effect” had any impact on the decision.

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5 years ago

20,030 “per share”?

5 years ago
Reply to  Rick


You have to give the AMAC editors a little slack. Emphasis on a little. I’m sure, based on previous economic and financial articles posted in this site, that financial news is NOT their area of expertize per se. Insurance and insurance by-products yes, but stocks, bonds, options and futures not so much. In many cases, what is done is cut and paste of stories from other sources. This article is from one such external source. So if the original author or publication makes a typo, it is repeated in the copied article here. After a while, you tend to overlook this stuff here. It’s not the WSJ or IBD after all. AMAC is simply trying to present a small bit information on what is transpiring in the markets post the Trump election. In all likelihood, this article won’t even make the weekend edition most AMAC members actually read. Instead we’ll get another repeat of the usual three topics.

5 years ago

Here’s what the Trump effect boils down to in terms most people can understand:

The overall market, not merely the DOW which doesn’t really represent the broader economy of this country anymore, will continue to climb as long as both businesses and investors believe that most of Trump’s economic agenda is going to enacted into law. As long as both groups see positive and timely progress being made towards the implementation of that agenda, the market will respond positively. Very straight-forward and simple.

If you bothered to actually read Trump’s economic agenda before the election, you would realize that it both greatly simplifies the tax and regulatory infrastructure in the United States, as well as also provides several powerful economic incentives for long-term business and job creation. After eight years of an administration implementing policies designed to both retard economic growth via regulatory and tax abuse, as well as inhibit meaningful business and job creation, it shouldn’t be a surprise that the market has been on a sustained upswing since Trump’s election.

The people who put together Trump’s economic plan did a very good job. As of today, the expectation of the market is that almost all aspects of Trump’s economic agenda will be enacted, If the market begins to sense that either the plan will NOT be significantly enacted or it is in some way significantly watered-down or altered to be far less effective, as in the Ryan proposed border adjustment tax or income tax rates not being lowered aggressively enough, 25 percent rate instead of 15 or 20 percent rate to attract foreign investment much in the same way Ireland’s 12 percent rate boosted their economy, then you will see the market correct downward as quickly as it went upward.

I understand why Ryan and McConnell might prefer Ryan’s approach. McConnell wouldn’t have to strong arm any of the 18 Senate Democrats up for re-election in 2018 in states Trump just won. Ryan wouldn’t have to put a politically unpopular budget together that would impose actual, real budget cuts, not merely reduce the rate of growth of the government budget, that Trump’s plan calls out for on most departments and agencies of the federal government. The AMAC article last week on the proposed cuts to the federal government unfortunately never made the weekend edition. So most folks might not be aware of how Trump would pay for his tax cuts by reducing a lot of the unnecessarily bloated federal bureaucracy in both size and scope. Anyway, both Ryan and McConnell could instead get the support of spend-happy Democrats, the much hyped “bi-partisan approach Dems and RINOs favor when talking about a tax hike, by instituting this whole new layer of taxation on the American people. So while many might think the Congressional Democrats pose the biggest threat to getting the Trump economic plan enacted, the reality is it really is the Congressional Republican leadership who desire to continue the “business as usual” way of governing.

Lee McQuillen
5 years ago
Reply to  PaulE

You make a lot of sense. I fear the “same old, same old” Congress people myself. It’s time for new thinking – the world has changed and the “old” way of conducting business is no longer acceptable. Time to think out of the box!

E Hanes
5 years ago

It is such good news that Trump has started the country going great–everything he has done is for the good–such a big change from Obama trying to kill the country

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