Market Commentary, 03/01/17
The Dow closed down on Tuesday (02/28/17), snapping a historic string of twelve consecutive all-time high closes, matching the prior longest streak in January of 1987. In its 120-year history, the Dow has never achieved a 13-day streak of records.
Today the Dow gained 303, closing at 21,115. The S&P 500 closed at 2,396, an all-time high for that index. Today’s advance was largely due to President Trump’s speech to a joint session of Congress last night and is a continuation of the “Trump Effect.” In what many saw as a rather reserved speech, the president said he would push for $1 trillion in infrastructure spending and he promised “massive tax relief” for the middle class and a reduction in corporate tax rates.
The reiteration of his campaign promise to cut individual and corporate tax rates is probably the primary driver in today’s stock market surge.
Also, the expectation for a rate increase by the Federal Reserve as early as this month increased significantly after New York Fed President William Dudley said yesterday that the case for an interest rate increase has become “a lot more compelling.” Usually, an interest rate increase isn’t necessarily a stock market driver but in this case it may signal that market forces are going to be allowed to work. This in contrast with several years of stock market performance tied, to large degree, to the Fed’s creating an artificial market environment.
We expect the market’s advance to continue as the president’s pro-growth policies are enacted.
Wayne Copelin, CFP®
President, Copelin Financial Advisors, Inc.
514 Brooks Street
Sugar Land, TX 77478
Phone (281) 240-2902
Fax: (281) 240-2856
Securities offered through ProEquities, Inc., a Registered Broker-Dealer and Member FINRA & SIPC Advisory Services offered through Harvest Investment Services, LLC., a Registered Investment Advisor Copelin Financial Advisors, Inc and Harvest Investment Services, LLC are independent of ProEquities, Inc.