Trump celebrates Dow Jones breaking 2500 just a he did last year at this time

US president Donald Trump always celebrates when the stock market is doing well so it is not surprising that on Wednesday he tweeted in celebration as the Dow Jones Industrial Average (DJIA) rose above the 25,000 mark.

From this January to last January the Dow Jones is now basically flat

On Wednesday the 29th of January 2019 Trump tweeted: "Dow just broke 25,000. Tremendous news! 1:54 PM - 30 Jan"

While this is positive for investors, since the Dow Jones has been doing badly lately, one needs to see how this compares with last year around this time. Investors want their investments to increase in value over time. A look at the history of Trump's tweets shows a forgetful approach to the fluctuations of the Dow Jones over an extended period.

On January 4, 2018 just after Trump signed into law his tax cuts that helped mostly businesses and the wealthy he tweeted: "@realDonaldTrump Dow just crashes through 25,000. Congrats! Big cuts in unnecessary regulations continuing.

9:48 AM - Jan 4, 2018"

Trump tweeted a third time on July 14, 2018 that "The Stock Market hit 25,000" meaning the Dow Jones average. He also said that jobs were at an all-time record and that he had fixed some of the worst trade deals and conditions ever seen by any government.

2018 was a bad year for stocks

The year 2018 was actually the worst year for stocks since 2008, the year of the great recession. While some factors causing the slide were due to Trump, others were not.

The present economic expansion has been continuing for so long, until recently slowing a bit, that many investors have been wondering how long their luck would last. A combination of global and domestic events may have convinced many that as of now things will begin to decline.

Trump's trade war with China is one of their concerns, in that it could have a negative effect on some farmers such as those who grow soybeans and also raise consumer prices. Economic growth has slowed in the EU and is also expected to slow down in China next year. The drama in the UK over Brexit is causing worries as well. Some worry also that the Feds may raise interest rates slowing growth.

As markets dropped during the late fall, Trump stopped talking about it, but talked about such things as low gas prices and low unemployment. As stocks have risen in January, he is back at his old boasting. As usual, he does not place it in context which shows that the stock market actually had a very bad year in 2018.

The issue is also covered on CNN.

Previously published in Digital Journal

US Stock markets declines as Trump rally slumps

March 22-- In the past the Trump administration has boasted of the performance of the stock market as evidence of the success of its policies. Now that the market has begun to drop, White House secretary Sean Spicer has changed his tune.

Spicer now says that it is unfair to judge the Trump administration's economic policy on the basis of the performance of the stock market. However, the market has done very well since the election and inauguration of Trump resulting in what has been termed the Trump rally. Just back on January 25th this year the Dow Jones Index broke through the 20,000 level. On March 1 the DJI broke through the 21,000 level and the Nasdaq and S&P indices also slashed records. Earlier at the beginning of February, Nouriel Roubini had predicted that the Trump honeymoon with the stock markets would soon be over. Perhaps his prediction is coming true now. Yesterday, the DJI, the S&P 500 and Nasdaq each fell roughly one percentage point. Spicer said: “You can’t look at one indices and say that’s the benchmark for an entire economy. You see confidence levels both in small business and other surveys that show there’s continued confidence in the market.”

As I write this on the morning of March 22, the Dow Jones is down marginally but still 20,657 a large increase even since he was inaugurated as president though down from it highs. Some type of correction was no doubt to be expected. The S&P and Nasdaq are up marginally. It is really too early to tell whether the Trump Rally is done. Trump is having troubles with his health care bill. He has yet to roll out his tax cuts and infrastructure spending program. When he does so this could boost the market.

The Trump administration began to crow about its performance when the DJI broke the 20,000 level. Kellyanne Conway, one of Trump's top advisers tweeted that it was "The Trump Effect". Anthony Scaramucci, a former hedge fund manager tweeted: “Dow 20,000 = big league. Thank you @POTUS @realDonaldTrump”

Treasury Secretary Steven Mnuchin also joined the chorus of praise for the Trump administration: "There's a lot of confidence in the Trump administration and in the desire to invest in the U.S. This is a very competitive place to do business. We've got great companies, and you see that reflected in the markets." He also said that the stock market indices were absolutely a report card on Trump administration economic policy. The custom has been for administration officials not to take credit for stock rallies since the opposition will attack whenever there is a stock market decline.

It may be that the downturn is just temporary. A Business Roundtable survey of U.S. CEO's last week showed them to be the most optimistic they have been since 2009 and another survey of homebuilders found them the most optimistic since 2005. In spite of all the criticism of Trump and his continual lying and controversial tweets, his administration after all contains an enriched collection of creatures from Wall Street who are just waiting to feed on profits from deregulation, tax cuts and military spending. It should not come as a huge surprise that his administration has had a positive effect on markets. It is much too early yet to say whether the present market decline is a Trump Slump or simply a correction in a continuing Trump rally.

Trump rally pauses as investors uncertain about future

(February 6) The U.S. markets have pulled back slightly today from the renewed Trump surge on Friday. However, the political furor over Trump moves such as his travel ban seem to be offset by positive expectations of Trump policies with respect to business.

Trump's recent move to change Dodd-Frank regulations on financial institutions was obviously a plus for markets. The Dow Jones average was still above the 20,000 level at 20,045.87 down just 25.59. So far, the political uncertainty and protests caused by Trump policies have not outweighed positive expectations for the future as indicated by market movements.

There are some signs that markets could turn down soon. Bloomberg data shows that the number of articles that contain the word "uncertainy" has reached a record. No doubt Trump can dismiss this as more fake news. However, investors could very well become uneasy if this view that things are uncertain persists. One would think that with such uncertainty the Chicago Board of Options Exchange Volatility index or VIX would be surging higher. It is not. Quite the opposite it has been unusually calm. Yet the Global Economic Policy Index a measure of disquiet among policymakers and politicians is the highest on record.

Another measure that gives a hint of danger is the CBOE Skew Index. This index measures the cost of buying protection against dramatic moves in the S & P 500 index. This index shows that investors are concerned about risks. Another sign that all is not well is that there is a lot of money going into gold and gold stocks. Barnaby Martin, of Bank of American Corp., wrote to investors: “While stocks and corporate bonds have rallied year-to-date, we see a very incongruous kind of calm in the markets at present. Note, that while equity volatility is still hovering around record lows, inflows into gold funds year-to-date in Europe have surged.”

Chris Flanagan also of the Bank of America says that a combination of rising yields and rising gold prices signals market volatility will soon rise. Rising benchmark bond yields together with rising gold prices have happened before previous market drops in 1973-4 and Black Monday in 1987. Further signs for a drop in the longer term are given in a recent article by Nouriel Roubini, Dr. Doom.

In Canada, even though stocks were down overall, many gold stocks rose with Barrick Gold rising 1.4 percent and Agnico Eagle up 1.3 percent to $64.97. The price of gold hit its highest level in three months as worries about the U.S. political landscape and the low loonie led to more investor interest in the metal. The financials group continue to gain slightly with bond yields rising after Trump on Friday promised to ease banking regulations. However, oil prices dropped as US supplies appeared ample and this outweighed OPEC output curbs and U.S. Iranian tensions.

The slight drop in U.S. markets may in part be the result of uncertainty over Trump policies while there was no major new economic data to move the markets. Nearly a hundred companies including Alphabet (Google), Apple, and FJacebook have banded together to present a legal brief that opposes the ban. Goldman Sachs economist, Alec Philips said that although Trump tax cuts and infrastructure funding could fuel growth his restrictions on trade and immigration could negate their positive effects. Adam Sarhan, CEO of 50 Park Investments said: "Investors are in a wait-and-see mode and are looking for the next bullish catalyst to send the market higher. There are concerns regarding the backlash against any protectionist policies that come out of Washington and other countries and investors are seeking clarity."

Dow Jones average breaks through record 20,000

(January 25) Positive corporate earnings helped raise investor optimism and extend a rally that has seen the US Dow Jones Industrial Average(DJ) climb above 20,000 for the first time ever.

The DJ index of blue chip US stocks reached its second fastest 1,000 point rise in history. The DJ had reached 19,000 on November 22 last year shortly after Donald Trump had become president-elect on November 8. European stocks also jumped but the Mexican peso lost value as Trump unveiled steps that included building a wall on the Mexican border. Oil prices dropped as US stockpiles increased.

Quincy Krosby, a market strategist at Prudential Financial Inc. said:“With a swift move towards signing executive orders, coupled with underlying positive economic data, clarity has begun to hit the headlines, and all the U.S. indexes are celebrating.“Clarity is the markets’ oxygen.” No doubt the nature of Trump's decisions helped markets as they included approval of two major pipelines. He also set out possible infrastructure projects and encouragement of auto producers to manufacture in the US.

The DJ had risen 134.64 points from the opening to 20,047. 35 at 11:45 AM. Boeing had the biggest gain of 4.3 percent. The Standard and Poor 500 Index (S&P 500) also jumped 0.6 percent to a record 2,293.68 at the same time. Stocks rose in Europe as well. However, West Texas Intermediate crude dropped below $53 dollars a barrel.

The Toronto Stock Exchange(TSX) hit 15,657.53 points quite close to its September 2014 record of 15,685.13 even though lower gold prices weighed on gold mining company shares. Among the gainers was pipeline stock Trans-Canada Corp. that rose 1.6 percent to an all-time high after Trump signed an executive order putting the Keystone XL pipeline back into play. The market appears to see Trump's policies as pro-growth and pro-business with tax cuts promised.

(January 25) The quite negative Trump policies such as building the wall on the Mexican border and restricting the entrance of people from a number of countries into the US do not seem to counter positive attitudes among investors to Trump policies. Indeed, Trump's anti-environmentalist moves are no doubt thought of as positive for corporate profits. Trump has placed a gag order on several government agencies including the EPA. The EPA has also been asked to freeze all grants, contracts, and other agreements until further notice. Meanwhile Canadian PM Justin Trudeau has applauded Trump's approval of the Keystone XL restoration.

Trump's withdrawal from the Trans-Pacific Partnership (TPP) and his move to renegotiate the North American Free Trade Agreement have not caused markets to turn negative. Perhaps investors believe that any new trade agreements Trump negotiates will not be against business interests. Given the make-up of Trump's administration that seems a plausible viewpoint in spite of all Trump's anti-establishment rhetoric.

Dow closes over 19,000 as Trump rally continues

(November 22) The US stock rally evident on Monday continued on Tuesday with the Dow Jones briefly breaking through the 19,000 level for the first time in history.

On Monday all four major US stock indices closed at record highs. The prices of energy stocks rose as investors see OPEC countries finalizing a deal to cut oil production a move that will help support oil prices. The Standard & Poor 500 closed at a record high of 2198.18 rising 16.28 points. The Nasdaq rose 0.9 percent or 47.35 points to close at the all-time high of 5368.86. The Russell 2000 rose half a percentage point or 6.59 points to 1322.23. The Dow Jones Industrial average also gained a half percentage point or 88.76 percent to a record close of 18,956. This is the first time that all four indices set a record in one day since way back on December 31st 1999 according to Ryan Derrick who is the senior market strategist for LPL Financial.

While media coverage of the Trump victory often stresses negative features of his campaign and choices for his government, the establishment as represented in stock market investors, sees his election in positive terms. His promises of pro-growth fiscal policies and tax cuts has resulted in many investors turning bullish about the US economy. The surge is also being bolstered by an anticipated hike in interest rates by the Fed next month.

The possible cut in oil production by OPEC members sent the price of US crude to $47.49 a barrel up almost 4 percent and Brent crude, the international standard, was up over 4 percent to $48.90. However, Quincy Krosby of Prudential Financial claimed that even if a deal does happen it will not have much impact on oil prices: “There’s nothing to suggest the agreement’s going to hold. When all is said and done, supply and demand will ultimately dictate the price.” The US dollar has been rising against many world currencies as investors foresee a Fed interest rate hike in December. The US dollar has risen almost 7 percent against the Japanese yen in the last week, which will help Japanese exporters.

The stock market rally continued into Tuesday morning with the Dow Jones Industrial index hitting an all-time high of 19,013.12 before falling back. As I write this about 11 AM Central Time, the index has fallen back below 19,000 at 18,973.71 but is still up on the day. Added to the tax cuts and infrastructure spending Trump is promising, he is also claiming to introduce simpler regulations in both the banking and the healthcare sectors. Robert Pavlik, chief market strategist at Boston Private Wealth located in New York said: "Optimism is returning because of the potential that exists in the form of fiscal stimulus, infrastructure spending and tax cuts and is renewing confidence on the part of investors and consumers." He noted the rally was broad-based, a positive sign for markets. The Toronto Stock Exchange S&P/TSX rose this morning to 15,085.12 shortly after the opening. Since Trump defeated Hillary Clinton to become president-elect, the Dow Jones has risen almost 4 percent. Shortly after Obama took office the Dow Jones hit a low of about 6,400 and so has almost tripled since then.

Trump's win plus the Republican control of both the Senate and the House appears to be taken as a plus by the market. Trump's policies together with those of the Republicans are considered overall to be business-friendly in spite of the fact that Trump has promised to dump the Trans-Pacific Partnership (TTP) deal as well as renegotiate the North American Free Trade Agreement (NAFTA).