The Dow Jones Industrial Average traded above 20,000 for the first time yesterday and world stocks hit 19-month highs on strong Japanese trade data, stellar European corporate results and investor enthusiasm over US President Donald Trump.
The President’s signing of numerous executive orders since his inauguration on Friday reignited a rally that began after his election victory in November. Mr Trump marked the milestone with a tweet: “Great!#Dow20K.”
Investors said crossing the 20,000 mark was just a number, but still nice to have.
“While the Dow hitting 20,000 is one of the least meaningful data points on my screen, it does suggest that the equity rally is pretty broad-based,” said Michael Purves, chief global strategist at Weeden & Co in New York.
Brian Jacobsen, chief portfolio strategist at Wells Fargo Asset Management in Menomonee Falls, Wisconsin said the moment was “like watching your odometer cross over 100,000 or peeking up at the clock and noticing that it’s exactly noon.
“There are no magic numbers but we like to pretend that there are,” Mr Jacobsen said.
The iconic Dow index came within a point of the historic 20,000 level on Jan. 6 as investors banked on pro-growth policies and tax cuts from the new Trump administration. The renewed focus on Trump’s policies to reflate the U.S. economy didn’t extend as much to bond and currency markets, where US yields only inched up and the dollar fell across the board, particularly against a resurgent British pound. MSCI’s global share index rose 0.67 percent to 435.61 points , its highest since June 2015.
The Dow Jones Industrial Average rose 141.33 points, or 0.71 per cent, to 20,054.04, the S&P 500 gained 14.22 points, or 0.62 per cent, to 2,294.29 and the Nasdaq Composite added 41.94 points, or 0.75 per cent, to 5,642.90.
The post-election rally on Wall Street had tempered in recent days as investors focused on the White House’s trade protection pronouncements.
The stock move since Nov. 22, when the Dow first closed above 19,000, has been spearheaded by financial stocks – with Goldman Sachs and JPMorgan together accounting for about 20 per cent of the gain. The two banks have benefited as investors bet Mr Trump’s expected fiscal stimulus will trigger inflation and stoke a rise in interest rates.
In Europe, In Europe, the FTSEurofirst 300 index of leading regional shares rose 1.3 per cent and Germany’s DAX rose 1.89 per cent to a fresh 18-month high, while France’s CAC 40 Index rose 1.17 per cent.
Earlier in Japan, the Nikkei advanced 1.4 per cent, buoyed by data showing the country’s exports rose for the first time in 15 months in December, a positive sign for the economy even as talk of US protectionism looms over the outlook.
Mr Trump signed two executive orders on Tuesday to move forward with construction of the Keystone XL and Dakota Access oil pipelines, rolling back key Obama administration environmental actions in favor of expanding energy infrastructure.