Dow Jones hits record high, continues surge since Donald Trump was elected
Since last fall’s election, the number has climbed by over 4,500 points.
Here at home, the TSX has seen much more conservative growth having risen around 1,000 points in the 12 months.
Solid earnings, stronger economic growth and hopes that Trump may be able to make progress on promised tax cuts have helped the market rally this year.
“The stock market is soaring to record levels, boosting pensions and retirement accounts for hard-working Americans. Their values are going up every single day,” Trump said Wednesday.
The Dow Jones Industrial Average rose 160.16 points, or 0.7 percent, to end at 23,157.6, the S&P 500 gained 1.9 points, or 0.07 percent, to 2,561.26 and the Nasdaq Composite added 0.56 point, or 0.01 percent, to 6,624.22.
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“Today the catalyst is clearly IBM … which appears to have turned the corner. It gave the Dow the boost to stay over 23,000,” said Quincy Krosby, chief market strategist at Prudential Financial told Reuters.
Despite Republicans being in control of all three houses of government in the U.S., many are concerned that they will never be able to pass the legislation that Trump and other prominent lawmakers have promised.
Treasury Secretary Steven Mnuchin spoke on a podcast Tuesday and issued a ‘sky is falling’ warning that if the government is unable to pass tax reform, the Dow Jones will crash.
“There is no question that the rally in the stock market has baked into it reasonably high expectations of us getting tax cuts and tax reform done,” Mnuchin stated during a Politico podcast released Wednesday. “It also has baked into it optimism on regulatory relief which they’ve begun to see and there’s expectations [of continuing].”
Of course, many predicted the market would crash if Trump was to win the 2016 U.S. election.
Trump’s tax plan would deliver up to $6 trillion in tax cuts to businesses and individuals.
The tax framework, developed in secret by a select group of senior Republicans known as the Big Six, calls for cutting the corporate tax rate to 20 percent from 35 percent and creating a new category for pass-through income earned by partners and sole proprietors, which would be taxed at 25 percent, instead of the 39.6 percent top individual rate currently paid by some.