(March 1)The Dow Jones Industrial Average (DJI) the index of blue-chip US stocks closed above 21,000 for the first time ever. The DJI rose one thousand points in just 24 days equal to the previous record of May 1999 when it rose from 10,000 to 11,000.
|Just a few weeks ago, the DJI took just 42 days to move from 19,000 to 20,000. Stock markets appear to be reignited by optimism about the health of the US and global economy and to believe that Trump policies of boosting spending, cutting taxes, and deregulation will result in increased profits for US business. The prospect of an early interest rate hike appears not to be regarded as negative but as a sign the economy is doing well. The rise comes in spite of the fact that Trump's speech had few specifics about his policies. The more positive tone struck by Trump seemed to soothe investor fears even though there is still much uncertainty about how Trump will be able to increase spending on the military and infrastructure, cut taxes and deregulate industry without huge budget cuts. It is difficult to see how he can not cut Medicare, and Social Security, programs he has promised not to cut. Trump said in his speech that he wanted "massive" tax relief, $1 trillion to be spent on infrastructure, and an overhaul of Obamacare. It would seem rather that he wants a replacement for Obamacare although it might be a type of "Obamacare lite". Republicans appear divided on the issue. Trump is no doubt worried about a negative reaction from his base if he does not provide a reasonable alternative to Obamacare that in spite of its problems insures many more Americans than previously.|