TRUMP RALLY BACK ON TRACK AS WALL STREET SNAPS SKID
Stocks snapped their losing streak Friday as Donald Trump took the oath of office for president of the United States.
The Dow Jones industrial average closed up 95 points, or 0.5%, to 19,827 Friday, preventing what would have been a sixth down day in a row. The gains pushed the Dow back into the plus column for the year.
The Trump rally had been losing its gusto before the inauguration as investors worried policy changes might be less stimulative than hoped. All three major market measures, the Dow, the Standard & Poor’s 500 index and the Nasdaq Composite, are down: 0.3%, 0.2%, and 0.4% for the week, respectively.
That’s why the strength Friday came as a relief. The Standard & Poor’s 500 index was up 0.3% to 2,271, just shy of its record closing high of 2,276.98 notched Jan. 6. The Nasdaq composite index was up 0.3% to 5,555 as it moved closer to its rec- ord close of 5,574.12.
Despite Friday’s gains, it was overall a negative week for stocks as investors fretted over what Trump might say in his inauguration speech regarding trade and government spending. Investors have been trying to price in the positives of lower tax rates and fiscal stimulation in the form of government infrastructure projects but also the negatives of trade restrictions and tariffs.
Such uncertainty is a reminder to investors that trying to time this kind of change is perilous.
“This bull market has room to run for a few months. I think most investors should stay focused on what comes after, when it may become much more of a two- way street,” says Jurrien Timmer, director of global macro at Fidelity Investments.
An expected improvement in quarterly results for corporate earnings as well as optimism over the Trump inauguration is lifting stocks, said Sam Stovall, chief investment strategist at CFRA Research. Analysts expect corporate profits to rise 4.4% in the fourth quarter, which would be the second consecutive quarterly increase.
“This bull market has room to run for a few months.”
Jurrien Timmer, director of global macro at Fidelity Investments