Stocks Continue Steady Climb in the New Year

On Wednesday, Wall Street stocks rose again—now two days in a row—as the New Year shows great promise for the Dow to break 20,000.

Indeed, the Dow Jones Industrial average was up roughly 40 points—about 0.2 percent to reach 19,921—after a much bigger 120 point rise on Tuesday.  Tuesday, of course, was the first trading day of 2017.  In addition, both the the Standard & Poor’s 500 index increased 0.4 percent.

Analysts are now suggesting that the market will continue to push upwards on the optimism tied to pro-growth promises made by President-elect Donald Trump.

“So far, the mood that began to emerge prior to the election and brightened after the Trump win, continues to be positive,” explains James Meyer, who is the chief investment officer at Tower Bridge Advisors.

At the same time, Meyer cautions that there is still the possibility for disappoinmtne later in the year, commenting that “nothing moves very quickly, even with an activist like Trump coming to the White House.”

ADS Securities institutional sales manager Remo Fritschi noted, too, that all three benchmarks ended the Tuesday trading day in positive territory.  He comments, “The Dow continues to sit tantalizingly close to that psychological 20,000 level, but the appetite to push higher still seems lacking.”

Fritschi also goes on to say, “A soaring U.S. dollar and more signs that U.S. corporates are going to find themselves facing very different priorities under the Trump administration–as seen by the threat of hefty import duties on cars made in Mexico–certainly seems sufficient justification for holding off from one final push, although [Wednesday’s] FOMC meeting minutes could well prove to be defining.”

Market participants now await the minutes from the Federal Open Market Committee meeting from Dec 13 and 14, which are due today at 2pm EST.  The central bank lifted interest rates at this meeting, but when the minutes are released we learn more about the potential for other hikes, later this year.

At the end of the day, Fritschi comments: “The market will be looking for clues as to how the Fed will respond to the new administration–and the fiscal challenges this is likely to bring–whilst anything that softens the hawkish narrative we saw painted in Janet Yellen’s speech last month could also give equities that much needed shot in the arm.”

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